Category: Free Essays

Introduction

Strategic planning has been previously used for the tangible products rather than being used for services like the hospitability or the tourism industry which has just recently gone through a massive change.. Previously strategic management was not applied to the sector as it was only restricted to the product industry whereas now the new dynamics have changed the workings and now strategic management has become a part of this service industry as well and not only that but now it is alos used extensively in the service sector.

Having said that , still the strategic management literature found regarding the hospitability and the tourism industry is very restricted as very less work has been done in this regard. The industry is still in its infancy so the limited relevant literature is an important issue. (Gilbert and Kapur,1990)

It will be noticed that marketing plays a very evident role in the process of strategic management because all the material found on the subject matter is referring to marketing while defining the business strategic business planning. This essay will attempt to define strategy and strategic planning using a case study of Disneyland Florida in relation to tourism to make a critical assessment.

This will be done by use of the internet, journals, books, and an attempt to speak to someone at county hall and the London Development Agency. The limitations for the study includes time constraints,, lack of literature that is accessible and constraint computer facilities.

Strategic planning theory

Strategic planning is considered as the vital function in the tourism and hospitability industry because it enables the firm to stay aware of the latest trends of the industry along with keeping the customers satisfied. This also gives a competitive advantage to the company over its competitors and helps it to work smoothly in the competitive and fast paced industy .

It is a very powerful marketing tool; which is used to identify the customer, the customer’s needs and wants to provide for those needs and wants.

Strategic planning is the process wherby abn organisation evvaluaates itself in order to determine its intended destination and formulates guidelines or ideas on how best to achieve it.

O’ Connor has defined it as an incorporated process where th success is based on the longer success mangagement of an organization. (O’Conner,2000)

Francis Buttle has defined it as a plan of action which is used to achieve the objectives. (Hotel and Food Service Marketing, 1993).

Further to elaborate the process has been described as a methodology where a fit is maintained beteeen the organization’s abilities , resources and the transforming oppportunites in the market. (Kotler, Bowen, Makens,2003)

Buttle has differentiated between the tactics and the policies where the policy has been defined as lasting conditions which are imjposed upon deceision making while a strategy is refered to as rather a flexible thing where the practices are change according to the situations.

Thus a strategy is an evolving process which keeps on changing . Hall has identified the procrss as very integral because it allows enough developments in the tourism while the unequal preparation and development activities with reference to tourism are connected to an entire wide tourism plan to provide an entire frame for tourism.

The strategic plans are considered as a long term goal which identifies chief means due to which the achieving goals has specified the important resource allocation to turn up at the ways. It has been considered as flexible and constantly evolving phenomena.

In 2005 Mc Gee has called at a transforming phenomenon which should be changed according to the ecxternal environment. Hospitality and tourism industry, countries, hotels and tour operations are always competing with each othere. Give the ficklenesss of consumers and the speed with which they are willing to move to other providers, it is imperative that organisations formulate strategies that would keep their target markets interested and attract new customers.

Kotler in 2003 has defined the term as a process where a fit is made beteen the organization and the resource in the presence of th transforming marketing opportuniteies. Thus, when formulating a strategy, an organisations’s employees are crucially important in the executing of these strategies. A successful outcome is wholly dependant on how consumers perceive tha organisation through the representation by its employees and that is the most important reason why the wworkforce is considered and an integral asset for a company.

Importance of strategic planning

It is requird to formulate current goal with a complete plan in the mind. The planning is important because it includes the feedback from all the stakeholders. Hereas when one fails to plamn the tourism trip them he may go through various sever problems or negative situations at the destinations, thus, the planning of tourism is considered as a very integral approach for the policy maker who are planning tourism development. (Hall,2008)

By planning the tourism development the things in the process could be made relatively easy. The actors in the presence of a plan may respond in fewer spans of time which may be beneficial for the policy ,makers and the tourism development as well and along with it, it would also provide a route to the planning process.

Destinations in general function in an extremely aggressive situation where customers have a broad variety to choose from and which are very often comparable within a district or country . The confront destinations have been forced to face is to the development of something which is an exclusive thing or a physical situation, or a culture, or perhaps a set of products that has the ability to not only satisfy one time visitors but repeated ones also. (ESCAP2010)

3. Tourism planning approaches

3.1. incremental growth approach:

Incremental growth refers to making sure that transformation can be done as the development processes opens up. In tourism this would be interpreted as that if formerly a plan has been made and the recommendations are also done, then the development alternatives are chosen prudently and is then implemented steadily and observed frequently until the objectives would have been met (Getz 1986). Even when the objectives are met, the incremental approach suggests a constant evaluation and check to make sure that the development supports cultural integrity and ecological integrity. Generally the theory which is applied at its best to the planning that generally takes place at different destinations and various levels that are site -specific. ( Tomothy and Tosun 2003).

The approach is significant because of its flexibility and the fact that it enables high levels of predictability. (Getz, 1986). The process which is incremental development enables flexibility and encourages efficiency as it gives space for adjustments and changes in the process of development in the cases where various situations exist which have not been seen previously and may hamper the development of tourism.

The advent o the incremental development has been contributed by the dissatisfaction of the conventional control which usually has focussed on quick development and partial flexibility. Previously a lot of stress is made on preparing the plan as the final prodfuct of a planning effort. Thus the approach manages to maintain that the planning process is constantly changing and is a continuous process, which should be adaptable keeping in mind the way of meeting the objectives of development. (Inskeep,1991).

In 1992 Timothy suggested at quite a few places that in today’s world quite a few clear examples of incremental tourism can be found because this newly developed concept has not been tried and tested much. Thus there are various examples of this around the world as well where long term strategic planning is doen in the manner that scatters physical and various othere forms of development initiatives into different development periods which may vary from 5 or 10 or 20 years. In 1991 it was suggested by Inskeep that the today’s modern tourism plans have adopeted the approach as a way which would enable it to check the progress and assure the viability of development programs.

It is important to note that when looking and evaluating tourism, incremental plans make things slightly complicated. Since, there are so many variations in the trends, the tourism industry is affected them by them increasingly. Consequently, it is important to ensure that plans for development are made keeping these things int consideration. According to Timothy and Touson (2003) there needs to be an incremental plan hich may be introduced. This incremental plan is all about a careful preparation of toruism based plans and it looks at the future potentials of the touism industry and also allows for a certain deal of flexibility coming along. This way even the future goals and aims can be looked upon judged and evaluated.

3.2 community approach

In relation to this perspective, Murphy (1985) argues and favours the community form of tourism as being more sustainable in contrast to traditional mass tourism. The one reason why this happens to be the case is because it allows for a greater ease and flexibility to the locals as compared to the traditional ways when strong leaders made most of the decisions regarding tourism. Also there must be a great deal of consideration to the local ecology before any means to allow an increasing amount of tourism are introduced.

According to cooper and hall (2008) the community based tourism approach has emerged during the 1970s and particularly has thought about by tourism secondly the main factors. Firstly, there needs to be a consideration of the ethical and social along with the economic negative externalities brought about by tourism . Next ,, It should also be noticed that if a tourism decision has to be made successful and effective, there needs to be a greater involvement of the local community in the decision making process.

Murphy (1985) points out htat the fact the local needs are looked upon to is an important phenomenon in tourism industry today. Take the instance of st Lucia and the street party nearby the fishing village of Anse La Raye. The place was particularly famous for the local fish fry project which involved the selling of the local sea food in the traditional way. The particular street was held out and its local touch manintained out against the increasing traffic and the great inflos of tourists from across the world (Competing with the Best).

Despite the many advantages that this approach has with it should be remembered that implementing such an approach has two main problems. Firstly, the approach is very time consuming and expensive to be implemented. This is because no clear decision can be made as to who decides how tourism plans should be made and finally who has the final verdict. Also since, its means of developing tourism may not be of a direct benefit to the country’s economy, the government may also be reluctant to encourage it.

In other words it may be said that he community approach to tourism focuses mainly on the development of the community rather than on the development of the individuals who make up the community. Thus the community in itself tends to be more important than the locals (hall 2008). The approach makes and gives a greater authority to the local stake holders than otherwise.

3.3 collaborative approach

With respect to the community based approach , hall states that collaboration of people in this case tends to be highly important.

There should be a constructive use of the many opinions and a joint decision should be reached

Gray (1989) states that a stake holder looks upon to analyse if the current circumstances help to serve his interest or not and that if there would be any collaboration that could be reached upon the various stake holders before reaching a proper decision about what to do.

When there is a joint deciosion which needs to be reached upon by everyone in general. It is important to note that the power does not rest within one individual but with all the people in total (wood and gray 1991). Thus , gray (1988) suggests that it is important for the stake holders to be responsible or eligible for the tasks that are to be carried put if the right type of a decision needs to be made. Also the stakeholders may not have an access to most resources which is also an important issue which may be needed to be taken into consideration.

Coordination has become one of the pre requisite for the planning and policy making of tourism. The term refers to the relating issues and decisions which enable them to match with one another and operate in a consistent manner.

Coordination for tourism takes place in 2 manners which is horizontally, an example of which would be between the gobernment agencies which would be answerable for different tourism- related actions at the similar level of governance which includes the national parks, tourism and transportation while vertically the example would be that among diverse levels of government (like local, regional and provincial with in an secretarial and procedure systems (hall, 1999). In order to attain complete tourism development, collaboration between planning sectors at all levels is very important.

4. practice of strategic

A business can have the best ideas and plans, however if the human resoures is not able to understand and carry forward the instructions, thus it may take the organization towards the failure.

Therefore it is necessary that an organisation conduct a SWOT analysis before formulating a strategic plan. Internal analysis of the organization which includes the strengths and weaknesses and the external environment for the opportunities and threats, the organisation would better understand how best to proceed with its strategic planning.

The strategic process of planning includes the indemnification of an organization’s , vision, and the environmental scanning and strategy formulation and strategy implementation. (www.quickmba.com). Carrying out a PEST analysis is also beneficial to the strategic planning process. It has been considered that the economic stability is very important for the financial safety. Sociyt and the culture of the operational area should be taken into consideration when planning and technological advancement would keep the organisation abreast and ahead of global developments.

5. Disneyland Paris in Europe (community approach)

Disneyland Paris in Europe is practical example of community approach.

Tokyo’s success made it clear to the management that the Europe Park would be a good idea. Dissatisfied with the Tokyo deal, the Europe Park was managed in a very different manner. Disney has now managed to negotiate a larger stake in the park, nearby hotels and restaurant amenities. This huge opportunity got with itself immense risks as well . in april 1992, Euro Disney welcomed the European visitors.

Euro Disney is located 40 km from the central Paris and as planned it has managed to be the most lavish and the biggest theme park that had to be built till now. (bigger than Anaheim’, Orlando’s or Tokyo’s parks). It was also projected to be a sure-fire money maker for its parent Disney. Neverthelesss, to the management’s surprise the natives failed to take goofy over Mickey .

The company struggled to get the consumers or huge sales, in the early years it had to ace a decline of over 10% . By summer 1994 Euro Disney had lost some $900 million, and up to today., Disneyland Resort Paris is still not profitable. Disney Group thought that they get success in Tokyo with Disneyland Tokyo now they had better idea and plan for other cultures to adopt the American Disney concept. Because of this they charged highly than others. When the Disneyland Paris was opened, in a limited time it gave shock to the Disney group that the plans failed to achieve their expectation. Due to this Disneyland paris faced a great loss in beginning and the condition start worse.

As a result, it was thought seriously by the management to shut down the park. In such a situation the Saudi al-wahid bin abdul-aziz al-saud provided the essential cash injection ($500 million) which became the life support for the management as it enabled the organization for the reorganization and the financial stability for temporary basis. This helped the park a lot and it managed to get back the foot fall of the consumers. The immense profit that the company has gained has encouraged it to expand with another “Disney Studio” and a retail and office compound in Paris.

5.1 Reason of Disneyland Paris Failure at the beginning

The reason of disneland paris failure at the beginning, Disney failed to approach public and public involvement. Due to cultural difference. This was the main reason of Disney failure and they experienced huge loss. The concept of disneland paris is similar to Tokyo and united states.

The concept of Euro Disney consider and known as American. The French people are very sensitive about their history, language and custom. They protect their culture and language against English. The environment of Disneyland Paris was totally based on American style and culture.

Disneyland Paris planning analysis

Analysis of the Disneyland planning shows that the concept of the Disneyland paris is very unique. The Disneyland brand is very famous in Europe. The Disneyland Groupe is well known in all over the world. The idea and plan of Disneyland is successful in California, orland and Tokyo. The location they chosen is good and target the all big markets such as united kingdom, germany, france, etc. The exudation of strategy is good. From theory strategic planning to reality the implementation of plan in action is well introduced. There is nothing wrong with structure and construction. Walt Disney company had built the bigger and most lavish theme park than other parks. The project is perfect but failed to work as Disney management whished.

6. result

From above mentioned data it shows that the strategy planning not always goes right and gets success. It’s important to achieve the task we should completely analyse all other aspects, because strategy planning is not sufficient for success. The other aspects that are related to strategy should be studying well weather it is related to loacation , finance, marketing, socially, economically, public approach and pubic involvement, advantages and disadvantages of strategy, profits and loss, a complete analysis of strategy is essential before exudation and implementation of strategic plan. Because the strategic out come depend on this . the result we get helps us to make a conclusion about how much the rate of success we achieve from this strategy. At the beginning Disneyland paris was not successful but after changing the strategy and again strat with new strategy process. In 1995 disneyland paris starts work well and European theme park become successful. The number of visitors is increasing day by day to visit Disneyland Paris.

7. island of timor-leste (incremental approach)

The island of Timor-Leste (Tourism development strategies for Timor – Leste is a classic example to show how tourism development can be allowed by using the incremental approach. The place is located near Indonesia and has emerged as a new country for tourism development. The tourist attractions in this country are magnificent landscapes along with ancient cultures as well as an attractive and distinct history. However , the island lacks infrastructure facilities in addition to an adequate level o financial investments and funding. Moreover, there is a need for a popular legalisation and the documentation of the various historical sites. There also needs to be a careful ensuring of the fact that the cultural buildings and monuments are properly secured (tourism development strategies for Timor-Leste)

According to the Timorese the incremental approach is the best policy to allow for a strong and sustainable tourism development because it considers community participation in addition to sustainability. The islanders believe that there are no hard and fast rules to provide a great deal of facilities to the tourists coming in. (tourism development strategies for timor-leste) the island tourists are against the hasty construction of buildings and thus aim to avoid them. However , they care for the sustainability of their environment which is and important step for the future because this timor lestor approach to develop tourism allows the maximum benefit of the local community.

Recommendation

Thus it can be assured that the Timor Lester approach allows for the maximum benefit of the local population and is therefore important for future developments as well since it focuses on step by step building of facilities and infrastructure which would be beneficial for everyone that is , the tourism industry, the tourists and also the economy of the country.

Conclusion

I have chosen examples of two different approaches of strategic planning related to tourism one is community approach and other is incremental growth approach. Disneyland Paris study analysis represents community based approach. Though the concept of Disney was good but initially they faced problems. In initially the Disneyland Paris strategic approach was not completely community based approach. Disney is copied same strategy of Tokyo and U.S. They failed to get people attraction. Disneyland management didn’t recognize the cultural and custom difference between America and Europe. That was the main reason Disneyland Paris failure at the beginning and experienced a great loss. The condition become worse Disneyland Paris failed to work as owners want. But later they start with new strategy that was completely based on community approach. Disneyland Paris starts work well and they succeeded in getting public interest. In incremental growth approach when planning stage is begin and after the preparation of the plan the options are chosen very carefully. Exudates step by step and monitored continuously until the task have been achieved. I believe that there are enormous advantage to this approach because tourism is multifaceted industry. In tourism the choices of tourist change rapidly. Island of Timor-leste near Indonesia has a unique magnificent landscapes, ancient culture and textured history. Its new for tourism development. The Island lack many facilities such as water supply, accommodation, roads and electricity, it is also lack of finance . according to ” In Trimorese” opinion incremental approach is the best because there are few programme for development those focuses on keeping natural environment. Incremental approach initiates a plan and use local support. Different locations have different criteria it’s not necessary that if one strategy is successful in elsewhere and when same strategy transfer in somewhere else it will get same response.

Introduction & Executive Summary:

Ritz – Carlton was founded by Mr. Cesar Ritz who initially worked in finest Hotels and restaurants in Paris. He owned grand Hotel Ritz and within one year he expanded wings in London and opened Hotel Carlton which became Ritz – Carlton Hotel Company. He believed in excellent personalized services which satisfied the discerning guest. Ritz – Carlton expanded to North America and ownership changed during 1983 to Johnson Company. During 1983 – 1987 Ritz – Carlton expanded domestically and internationally under new ownership. [i]

During 1997 Marriott International purchased Ritz – Carlton and by 2000 it became primarily a management company operating 38 Hotels and resorts worldwide with minority stake in 10 properties and outright ownership of 3 hotels. The company used to obtain management contracts for new hotels and resorts around the world.

Over the year’s hotel conglomerate won & acclaimed for its services and had been awarded Best Hotel in Asia – Pacific in the eight Business Traveler Asia / Pacific magazine Travel Awards Subscribe Survey and for two consecutive years Best Business Hotel in Malaysia.

The Ritz – Carlton Hotel Company for the first time now wants to open a hotel in historic Foggy Bottom district of Washington D C in Multi – Use facility complex owned by Millennium Partners. The Hospitality Complex is 162 Luxury Condominiums, sports club, splash Spa, three restaurant, and 40,000 square feet of street -level restaurants and retail shops and 300-room hotel.

Millennium partners founded in 1990 that set up high end luxury apartments and Lincoln square four building complex in New York was their first project and exhibited their future intensions. Millennium partners ended up in hotel business.

In this case study Essence of Ritz-Carlton experience, the Ritz-Carlton selling, how the Ritz-Carlton creates “Ladies and Gentlemen” in only 7 days. Also McBride, Ritz-Carlton GM, to lengthen the amount of time spent on training hotel employees before hotel opening. McBride should consider a total overhaul of the hotel opening process.

Products and Services

Ritz-Carlton Hotel Company develops and Operates luxury hotels. Hotels are designed and identified to appeal to and suit the requirements of major customers including meeting event planners, Business travelers and leisure travelers. Ritz- Carlton set out to open any new hotel Ritz-Carlton including detailed analysis of site selection, new product and service development and feasibility study. The detailed analysis also includes target customers, their needs and expectations. The each hotel customized to meet local market demand. Innovation through make use of latest technology for enhancing customer satisfaction level – Link restaurant services through internet KobaltExpress.com. It allows customers to decide menus ahead of time and also select the choice of table. Differential aesthetic look and best quality interior was few of the additional features.

Core Values & Business Model

Following are the core values and Business model exist at Ritz Carlton:

Core values: Trust, honesty, integrity and commitment.

A great emphasizing on human resources, believes it important and biggest assets

Foster work environment to fulfill individual aspirations

Focus on Service but not sales

Guest greets at Airport with mimosas and discount coupons on a silver tray

Airport check – in concierge

Techno savvy to ensure customer’s needs satisfied

Event Planners

Ritz -Carlton managed properties for Millennium partners who were one of several hotel owners. Ritz – Carlton charged management fees of 3% of total revenue besides wholly owned luxury hotels around the world. The customer segment was Independent travelers and Meeting Event planners. The key success indicators of hotel business were “Average Daily Rate” and Revenue per Available Room”.

Independent travelers were influenced through special services like providing discounting coupons at airports, created hotel room at airport and also introduced “Technology Butler”. The specialized services increased customer convenience and outpaced the competition.

The nature of services is perishable and individual travelers are aiding in profitability. The event business / meeting business are growing and desirable for the sustainable profitability. The management contracts tend to meet needs of owners and operators.

Quality at Ritz – Carlton:

Ritz Carlton has a great emphasizing on human resources. Robust HRM practices envisage right people for the right job and inducted to become perfect lady and gentleman. The total quality management philosophy began to permeate the organization. Company focused on new activities and measures including quality standards, continuous improvements for delivering better service & quality. New programs designed to meet customer specific need and service quality indicators. The Quality policy believes in “Exceeding Standards”. Warm and sincere greeting, anticipation and compliances of guest needs and warm good bye are key service steps.

Human resources at Ritz – Carlton:

Human resources is critical element in the process for understanding of the service to be delivered and priorities in doing so, are aligned closely with customers’ expectations and marketing communications by the organization. For managers, the service climate needs to support and reward employees in their efforts to deliver the service product reliably at the promised standard.

The value creation for customer –

If the customer perceives quality of the service to be higher than the cost incurred, the customer receives value.

The greater the difference between the quality of service and the cost, greater will be the satisfaction or dissatisfaction.

Ritz – Carlton turnover rate was 20% compared to hotel industry average rate of 100%. This exhibits how Ritz – Carlton cares about their employees and viewed their employees as one of the important and biggest assets and has passion for the people. Ritz – Carlton nurtured and maximizes talent of each individual. Through the extensive formal and informal training employee were prepared to meet current obligations and also higher responsibilities in future. Employees were also trained to meet futuristic obligations and encouraged to cross train and learn about many different aspects. Performance was not only criteria but also managed by the employees themselves.

Employees monitoring their own performance and recognized for outstanding work.

Staffing:

To minimize failure in delivering services, key HRM practices like employee recruitment, selection and training focused and implemented. People having aptitude, talent and attitude to serve people, training schedule made sure to shape out staff for delivering exceptional services. The key of maintaining exceptional service standards was to keep high morale and motivation of each employee. Various tools were used to attract applicants for the various positions include visiting competitor’s restaurants, advertisement in news papers and visiting hospitality schools. Ritz – Carlton job fair was organized for mass recruitment. Aspirants treated well including convenient reaching to destination of job fair, offering snacks and beverages, make them aware about organization.

“Service Oriented Approach of Ritz-Carlton

The customer service oriented approach has three elements: For whom services and products created who will deliver and how will be delivered.

Customer Value

Customer relationships and customer loyalty

Different communication and pricing strategies

Assessment of customer satisfaction and complaints

Making customer value more tangible

People

Role of employees in value creation

Nature of competencies required to deliver services

Empowerment of employees

Reduction of stress

Operations and Technology

Designing processes to create value

Design and location of facilities

Role of technology

Capacity management

The Ritz Carlton having different value and philosophy in business which includes and they operate The Credo, The Motto, The Three Steps of Service, Service Values, the 6th Diamond & the Employee Promise.

The company is engage in the services oriented which have the unique characteristics for providing the services in order to meet the expectation of the customer. Some of the highlights have been captured depicted below:-

Excellence in service not in Selling

The Ritz-Carlton Philosophy states as they are not in the hotel business. The Ritz-Carlton is selling an experience, and experience that is based on excellence of service. As stated by Schulze, “We are not in the hotel business. The hotel business is about selling rooms, selling food, selling the bar. We do those things incidentally, but our business is service. We charge for service. Our commitment to our customers is excellence in service”.

Their commitment to customers is excellence in service. Service is their profession. The total service oriented approach.

The Credo

The Ritz-Carlton Hotel is a place where the genuine care and comfort of guests is the highest mission. Pledge to provide the finest personal service and facilities for guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfils even the unexpressed wishes and needs of guests.

Motto

At The Ritz-Carlton Hotel Company, L.L.C., “We are Ladies and Gentlemen serving Ladies and Gentlemen.” This motto exemplifies the anticipatory service provided by all staff members.

Motto of the company, Employee commitment, The credo, employee promises and twenty basics are gold standards and success mantras. Gold standards reinforced on daily basis in order to build the habits of employees to deliver the highest level of services

The three steps of service,- A warm and sincere greeting. Use the guest’s name. Anticipation and fulfillment of each guest’s needs Fond farewell give a warm good-bye and use the guest’s name.

Service Values:

Employees feel proud To Be Ritz-Carlton as they have opportunity to do following which gives them job satisfaction. The Ritz Carlton is known for service excellence and follow following principals to provide excellent service to their customers..

1. Employee satisfaction.

2. Leadership involvement.

3. Determination, commitment, and accountability.

4. Attend to “voice of the customers.”

5. Two-way communication.

6. Freedom to act.

7. Employees as ambassadors.

8. Adapt service recovery model (L.A.S.T.: Listen, Apologize, Solve, and Thank You.)

9. Anticipate needs.

10. Scripting to convey the right message [ii]

The 6th Diamond – is Mystique, Emotional Engagement & Functional , these all cared by Ritz- Carlton and known 6th Diamond.

Employee Promises – At The Ritz-Carlton Ladies and Gentlemen are the most important resource in service commitment to guests. By applying the principles of trust, honesty, respect, integrity and commitment, they nurture and maximize talent to the benefit of each individual and the company.

The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened. [iii]

Creating Service Oriented culture through orientation

Servitisation approach means bundling goods & services and makes a integrated package. This approach more focus on associated services than product

Four steps in creating servitisation approach:-

Knowing your customers

Organizing service delivery systems

Making sure employees have appropriate skills

Employing technology

A services discipline is defined by the following main features:

The benefits it offers to customers

The need to integrate, manage and deliver processes

The importance of establishing and maintaining relationships

The Ritz-Carlton As a premium hotel whose utmost mission is to provide “genuine care and comfort to guests,” The Ritz-Carlton pledges to “provide the finest personal service and facilities to the guests who will always enjoy a warm, relaxed yet refined ambience.”And this objective can only be fulfilled by satisfied and engaged employees.

The three goals of Ritz are financial results, customer satisfaction and employee satisfaction. These goals are not exclusive from each other. They are very closely interrelated. Without satisfied and engaged employees, there is no way to achieve excellent financial results and guest satisfaction.

To ensure such high service standards, Management team look for people who will fit the existing culture and see the following qualities in the people.

People who share the same values and purpose.

People who care for and respect others.

People who smile naturally.

People who seek a long term relationship.

People who have talent for the job

Process of Ritz to create “Ladies and Gentlemen” in only 7 days

The seven days countdown was formulated for hotel opening process which was refined during in the process of last several years , this was the new employee’s first encounter with hotel, which started exactly seven days before the grand opening of the hotel.

The first two (2) days were devoted to orienting employees to the company culture and values.

The next five days were devoted to more skills training and trial runs of service delivery.

To ensure that employees are get aligned with organization mission and core values.

Trainers from 23 nationalities

The orientation process is slow and thorough, and ensures that the employees are aligned with the organization’s mission and a great deal of focus is kept on the conveying the values of the organization.

The trainers for the orientation program are gathered from 23 different countries, all considered the “best of the best” in their role within the organization. These trainers are responsible for ensuring that each employee is at the required level or standard in their specific job function at the hotel.

Schulze addresses the new team by stating, “You are not servants. We are not servants. Our profession is service. We are ladies and gentleman. We are ladies and gentleman and should be respected as such.” He conveys a message of unity, a message of equality and team work during his address, and he again insists that “We are ladies and gentleman serving ladies and gentleman”, as per the Ritz Carlton motto.

The Ritz-Carlton employed the “Gold Standards” to ensure this message was communicated effectively to all employees; the Gold Standard included “The Credo, The Three Steps of Service, The Motto, The Employee Promise and the Twenty Basics” to ensure employees were focused on the organizations values.

Through continuous communication and brain storming session and directives from top to down level and intensive training, skill development and an aligned HRM strategy, within 7 days the Ritz-Carlton managed to create ladies and gentleman out of their employees.

The steps for making Ladies and Gentleman
Training and daily line-up:

During the first two days employees were aware, trained and dipped into the culture and values of the organization and remaining five days devoted to specific skill training and trial runs of service delivery ensuring everything perfect and meeting service standards. The orientation process ensures aligns the worker with the mission of company and ensured service philosophy ingrained in all its employees, they ingrained the message that all employees are in the service business and not the hotel business.

The executive team and Human Resources explain The Ritz-Carlton Credo, Employee Promise, and 12 Service Values. After that, they will receive 30 days of training from a certified trainer from the department. On Day 21, new employees are asked to give the management feedback on how they can improve their training program for future training and recertification. In addition, every employee gets a minimum of 130 hours of training every year, which spans training for his or her department, company culture, and language and computer skills. Day 365 is recognition of one year of loyal service and is an opportunity to reinforce the hotel’s culture. Every employee will also go through annual recertification after they pass written tests, role-play and interviews on culture and skill.

Daily line-up – is a daily briefing to reiterate the company’s standard and convey important business messages. It takes place every morning in each department. While each department may conduct briefings differently, the message they convey is the same worldwide: they will talk about one of the 12 Service Values.

Listening and communication: –

Communication is important and creates abundant opportunities to interact with employees beginning with the interview and continuing through monthly breakfast meetings and his daily rounds of the hotel: Human Resources also holds a monthly feedback session with randomly selected employees for 1 to 1.5 hours to discuss their concerns. Overall, every employee has one opportunity every year to speak with the General Manager or HR Director in private. In addition, the hotel conducts annual employee satisfaction surveys, and on an ongoing basis, collects opinions on employee issues and posts them in public areas identifying those responsible for solving them. The executive team then notes the number of issues solved and measures the satisfaction of the employees.

Empowerment and continuous improvement:

Employees are also encouraged to be innovative and creative when it comes to improving their jobs. Money is not the key motivator; employees are rewarded for improving the goals measured by guest satisfaction, financial performance and employee satisfaction at year-end. Employees are rewarded and recognized for their outstanding customer service. [iv]

Information support:

Through their numerous interactions with guests throughout their stay like check in, room service, and housekeeping, employees continuously record guest preferences and needs in Guest Preference Forms. Every night, such preferences and needs are entered into The Ritz-Carlton’s worldwide database Project Mystique, so whenever guests make a reservation at a Ritz-Carlton hotel, their needs and preferences are known and taken care of.

Reward and recognition:

At The Portman Ritz-Carlton, employees are recognized and rewarded both financially and non-financially. Mark DeCocinis believes if you want your people to be the best, you must pay them top market salaries. While money is not the key motivator, employees are rewarded for improving the goals measured by guest satisfaction, financial performance and employee satisfaction at year end. Employees are rewarded and recognized for their outstanding customer service. Every quarter, a Five-Star Employee Award is granted; with the winner receiving a five-night stay for two at a Ritz-Carlton anywhere in the world, along with round-trip tickets for two and US$500 allowance.

At Ritz -Carlton human resources are very well planned they treat with hospitality. As per their President who says you are not servant. We are not servant. Our profession is service. We are ladies and gentleman, just as the guests are whom we respect as ladies and gentleman. If you impart such culture be sure you will create ladies and gentle to serve.

Give the respect & take the respect, which costs nothing only wins, the heart of the customer who is taking the service & will have regards for the service provider.

Employee orientation schedule

Employee orientation is key part of the training and development process which introduces employees to the jobs, colleagues and organization. Researchers have found that formal orientation can achieve significant cost savings by reducing anxiety of new employees, fostering positive attitudes, job satisfaction and sense of commitment at the start of the employment relationship.

The 7 day countdown was a Hallmark of Ritz Carlton’s well defined hotel opening process which synchronized all steps leading to the opening of a new hotel. It was Ritz Carlton’s orientation process aimed at aligning the employee with the vision and mission of the organization. The 7 day orientation process was standardized and ensured that Ritz Carlton has the right employees to support its vision which was “Excellent Personalized Service”.

The seven day countdown was a worldwide best practice for the organization but in our opinion McBride should lengthen the 7 day countdown because of the following reasons:

Current difficulty faced in training new hires to meet the high expectation of Ritz Carlton’s standards in only 7 days. An increase in the training period would help employees understand their role in achieving the key success factors and creating the ‘The Ritz Carlton Mystique’.

By lengthening the 7 day countdown the service could become flawless which in turn could help translate the 5% dissatisfied customers to satisfied customers. This would result in occupancy going up from 80% to 88% due to increase in satisfaction level translating to $300 million.

Extending the 7 day countdown means investing in long standing excellence in areas such as employee orientation and customer oriented training resulting in increased customer engagement and satisfaction. Research on guest-spending patterns indicates that a four percent increase in customer engagement company-wide would generate an extra $40 million in incremental revenue.

Employee’s morale is boosted as they are protected from feeling overwhelmed. A longer employee engagement would also mean further decrease in the annual turnover which stood at 18%.

Adults by virtue of having lived longer accumulate greater volume, knowledge and mind-sets. It would help to have more time for the employees to o un-learn and learn new things.

Continuous improvement was absolutely critical to keep the commitment to customer for excellence in service and extending the 7 day countdown would help the process.

Would help thwart competition from ‘The Four Seasons’ by offering flawless service which can be achieved by increasing the orientation period.

Would help meet the expectations of the Millennium Partners about this hotel offering ‘great great service’ which means it expected Service par excellence.

Thus we believe that Ritz Carlton should therefore increase the length of the orientation to further ingrain service excellence in its new employees which will ensure higher productivity and foster competitiveness.

An assessment of 7 days vs 14 days training program

50% occupancy revenue = $5,000,000

Cost of the 7 day training program = $10,00,000 (estimated)

80% occupancy revenue = $8,000,000

Cost of the 14 day training program = $20,00,000 (estimated)

Benefit of the program = 3,000,000

Additional Cost = 1000,000

Return On Investment = 300%

Every investment including investment for employee training associated with cost and benefit. The cost and benefit mean cost involved in training of employees, direct revenue benefit, intangible benefits. The increase / decrease training schedule also adversely / favorably impact.

Ritz – Carlton is well known name to the industry and known for service centric approach. Initial Occupancy may not affected by training period but message of customer care approach need to be ingrained. Local culture also affects the training schedule as behavior of individual employees need to framed up in line of the global approach.

Change in hotel opening process

Change is part of life. World scenario is becoming dynamic and industry is coming up with innovative products to lure customers. In order to stay ahead in competition, Ritz – Carlton also need to think differently.

The entire training module, customer expectancy needs overhaul of the hotel opening process. The defects need to eliminate within shortest time frame.. Additional training and development will increase the cost but it will build up confidence and set new industry bench mark.

Ongoing operation is very different from the opening a new hotel. The opening hotel require two core competencies

One is dealing with the development of the site.

Human resource processes necessary to get the hotel up & running.

Ritz-Carlton regarded employees as the cornerstone of its exceptional service culture. The company understood that, as a service organization, the quality of its end product was only as good as the people providing it. Therefore it took care to see that it not only recruited the right kind of employees, but also provided them with the necessary inputs to enable them to provide exceptional service.

Although Ritz-Carlton’s salaries were not significantly higher than those of other comparable organizations in the hospitality industry, the company was a preferred employer because of its organizational culture and the way it treated its employees. Ritz-Carlton’s organizational culture not only helped the company provide exemplary customer service, but also created an atmosphere where employees felt valued.

It is difficult to train new hires to meet the high expectation of the Ritz Carlton service standards in only seven days, but it worked in Ritz Carlton. Training should not be longer which will not be cost effective in the short span of the time.

The employees already working should be given chance to in the second opening millennium to avoid taking risk at the opening itself.

Recruitment should be done for the Ritz Carlton not for the millennium because the employee can be transferred as per the requirement.

The employees of the Millennium partners can be taken for the opening, as the partner’s employees will feel proud to work jointly as a team. This will give opportunity to the partner’s employee who knows the brand & fame of the Ritz Carlton by giving the Ritz Carlton basics.

Ritz-Carlton management takes the following four steps to ensure that employees maintain the company’s high standards for quality and service

Excellence, as articulated in the Gold Standards: (i) rigorous employee selection process, (ii) employee orientation, (iii) employee training certification, and (iv) continuous coaching.

Conclusion:

The service industry is becoming more competitive. Global aspirations and technological innovations are challenges for the industry. Customers are loyal to the services rather than company. The services need to revisit and provide latest offers. World’s best organizations believe in beating their own standards and developing innovating products to serve and win customer hearts.

100 % employee pride & Joy, Zero customer difficulty and 100% customer loyalty are performance criteria of performance excellence set by Ritz – Carlton Hotels. The road map created for performance excellence through strategic planning, leadership, Human resources, Processes & Systems, customer focus, information & analysis finally business results.

Employees groomed and equipped to exceed (Not meet) customer requirements. Regular updating training needs, deliverance evaluation, PDCA (Plan, Do Check, Act) and Z- back approach; unlearning – learning approach aided in meeting industry challenges.

Kingfisher is a major airline based in Mumbai, India. It is the fifth Indias airlines that provide largest passenger airline in which international and domestic flights are provided to the customers with very flexible fares. Kingfisher is one of the largest airlines in India and it was established in 2003. It is owned by the Bengaluru based United Breweries Group. Basically the commercial operations are started in 9 may 2005 with the fleet of four new Airbus A320-200s Operating flight from Mumbai to Delhi. Then the next international operations are started on 3 September 2008 by connecting from Bengaluru to London.

The Kingfisher airline has been facing financial issues for many years. Kingfisher airlines have the second largest share in the air travel market till December 2011. However due to the

astringent financial crisis faced by the Kingfishers airline, it has now the fifth largest market share currently and only above Go Air Airlines.

Kingfisher Airlines is one of the only seven airlines that are awarded 5-star rating by Skytrax along with Cathay Pacific, Qatar Airways, Asiana Airlines, Malaysia Airlines, Singapore Airlines, and Hainan Airlines. Kingfisher operates 250 daily flights including domestic and international services. Kingfisher Airlines carry more than 1 million passengers which help the Kingfishers Airlines to make the highest market share among all other airlines in India in May 2009. Kingfisher also holds the Skytrax award for one of the India’s best airline of the year 2011.

Background: Main issue of the downfall of the Kingfisher Airline.

All things are going in a very good manner and kingfisher is at its peak but in 2005 the airline faced many problems in the operations, the Airlines then reported as in loss. But the situation become worst when the new airlines called Air Deccan is adopted by the Kingfisher airline in 2007.

Due the collaboration with the new airline the Kingfisher suffered a loss of over Rs. 1,000 Crore continuously for 3 years. In the Starting of 2012, the staff of Kingfisher airline is going on strikes and it also faced a very big loss of over Rs. 7,000 Crore with half of the money is bankrupted. In this tough situation the faces mainly faced financial problem and to overcome the situation the airline went for loans, so that they can cover it. But the heavy interest and debt, in November 2010, the company adopted a way to decrease the burden the airline adopted debt restructuring on those total 18 leading lenders, those have landed total Rs. 8,000 crores, they agree to cut the interest the rates and convert part of loan into equity. As per the contract the lenders have to convert the debt into shares which is converted into equity. Due to this company able to cut down the average interest to 11% and save Rs. 500 Crore every year in the interest cost.

The use of the strategy Debt restructuring also didn’t help the airline a lot; no doubt by using this it reduced the interest charges by Rs. 500 crores every year, but due to the high increase in cost and many other factors the company started faced problems of liquidity. Due to no funds available the company also faced these types of problems like delayed salary there are over 6,000 workers which are working in the company and after the financial crisis company have delayed salaries of the staff that will affect the workers a lot because they are working like the same and we can say they are working more than normal but these type of problems decrease the workers morale and dissatisfaction factor also arises. Due to the non-availability of the funds they are also many things that will effect like due fuel, Service tax, Air craft lease rental due and many more.

Current Situation: Problem still continues

Kingfisher airlines started to cast down into fresh crisis. Many flights are cancelled and many aircrafts are grounded. The company shut down many important international operations and closed the booking of the tickets. Kingfishers have many aircraft and only few were operating and presently very less airplanes are operating and this dropped highly in market share. Main leading State bank of India also not giving more loans to the company unless they pay the previous amount. Now a day it is very hard situation for kingfisher airlines in recent months.

The service of airline provided by Vijay Mallya is not glamorous as it was previous times because many flights are cancelled when customers are waiting to departure and this will underestimate a lot to customer. The management is main issue here in the Kingfisher airlines they need some expert CEO’s that help to check the activities every day but Vijay Mallya is the only one that control the whole company this may be the biggest cause of downfall of the kingfisher airlines. In big organizations lots of discussion and suggestions are needed that help to make any decision easily.

This causes which disturbs the relation between the employees and Vijay Mallya because there must be some time given to each and every employee so that they feel motivated and feel their suggestions or any need of help are given by the company, this help them to stay satisfied and they work with their full effort. Vijay Mallya always kept saying that the reason behind downfall of company is that the rising fuel pricing and other factors contributed the downfall of the company. But there are other factors also.

Some other reasons that also contribute to the downfall of the kingfisher airline:
Sociological:

Now a days traveling by plane is not a big issue because there are lot of airlines from which we can select any one according to our financial status. Every flight has its own way of treating passengers because in today’s world going one place to another is not a big deal all matters how was our journey what are the experience and how comfortable are you in the whole journey.

As being a 5 star airline they provide good service to the passengers but the prices are also very high only the high profile or above the economic level people adopt Kingfisher airline. Due to the luxurious level of treatment they are willing to pay more than other airlines charge. But they have to be economical so every economic person can also have the experience this type of luxurious treatment this also help them to gather more and more customers.

Technological:

In today’s world technology plays a great role in any type of the company. Kingfisher airlines don’t provide a TV screen on the back of the seat, so that every passenger has its own personal TV. Now people use technology they want to do the whole work with the help of internet and do all the work while sitting in their home. This also attracts customers to do all the booking while relaxing in their home and they don’t need to stand in the long queues on the ticket counters.

Economical:

Now a days economic issues is a major concern because people are now check not only the luxurious treatment they also check whether it is worth going or not. There a lot of bank credit options that are available in the case of travelling this are also the reason that affects the sales of the aviation industries.

In India there are lot of factors that affect the organisation like the inflation, interest rates and recession. There are government policies that effect the organisation a lot. There are lot things which have to consider while planning the economic factors because that depend a lot on the success of the organisation.

Ecological:

Nature also effect the aviation industry a lot because the climate affects a lot on the aviation industry weather should be stable in the time of the flights because if the climate is not good they are delayed and this disturb the customers a lot.

Passengers who pay so many amounts to get good service and comfortable journey in between if something happen this disturbs a lot. If something happen like delay in the flights airline have to provide facility and accommodation for the customers this costs a lot to the airlines but they have to do for the passengers to calm them down and this help them to understand the problem and they don’t take any chances to lose the customers because if the customer have any bad experience they might not go next time with the same flight because they are many others options available to them. In India weather is stable for most of the time and passengers are not use to these type of situation so aviation industry must be prepared if any thing happens.

Political:

In India in every 5 years government changes and also it is a democratic country. Kingfishers have great benefit of this because the owner of kingfisher Vijay Mallya have good political network which helps to their airline. No doubt, the political network is great but this not always help because all have to follow the government policies and rules.

Legal:

Rising Fuel pricing is also the main issue in India. The aviation industries have to pay large amount of money for fuel. To overcome this problem aviation industry increase of decrease the level of services to the passengers which help them to cover it up.

Ethical:

Indians are very ethical people they always think before buying anything they always check which thing is good for them and also gives some benefits to them. Like in India there a lot stationary products which are collaborated with some non-profit institute or any other institute which gives some amount when someone buy it, majority of people willing to buy that product because they help the needy people. In past Kingfisher gives value for the money that is why people are willing to give more money after all kingfisher airline is the 5 star rated airlines.

Analysis:

No doubt kingfisher airlines are one of the successful airlines in India. But there are lot pros and cons there which lead them to downfall of the successful airline.

Pros:

Kingfisher is one of the luxurious flights in India.

Kingfisher is a well-known brand and the financial status of the organization is very good.

The connections between the political and the owner of the Kingfisher airlines are very strong.

Kingfisher has a strong relationship with parent United Breweries Group which supports them a lot.

The customer service is very healthy. Kingfisher provide very luxurious journey to the passengers.

The staff is highly trained and very professional with customers.

Cons:

The management practices are very poor and the organization structure is not formed properly.

Kingfisher airline is not producing the expected returns from they are spending.

Sales are getting lower and lower due to cancellation and delayed flights which customers don’t like it.

Due to the 5 star brand of the company it is spending more than normally which is very hard to recover the money.

Things need some changes:

There are lots of things which are needed to be change which help the kingfisher airlines to recover. Aviation industry is now days are very popular and competition is getting tough and tough. To successfully run the aviation industry there are many things which have to keep in the mind while successfully run the business. In Kingfisher only the owner Vijay Mallya is having the direct control on the business and due this there is problems occur.

In kingfisher there is huge network and there are many employee works there and to satisfy the needs of the employee only one person cannot keep it. There must be some professionally and fully trained CEO must be hired to control whatever is the situation. Vijay Mallya also taken wrong step while cutting the salary of the employees and even the salaries are delayed for many months and according to the Herzberg’s Motivator-Hygiene Model the customers are Dissatisfied because they are not getting the salary on time.

In the recession period of Kingfisher airlines they also misbehaved with some customers due to the frustration and this will lose their customers. In this period the Kingfisher airlines introduced a new airline called Kingfisher red to cover some expenses because it is comparatively low cost.

Once there is an incident occurs passengers booked the ticket for Kingfisher Airlines and when they come to the flight the realize that this is not Kingfisher fisher this is Kingfisher red and when the passenger asked for that then they asked that there is technical issue in the website it was not distinguishing the two airlines differently but this is not a valid reason because as I said earlier that the technology plays a great role in today’s world people are now days very techno used and they know which flight they are booking. The main question is that why the kingfisher is running a cheap airline after all Kingfisher is one of the top brand 5 star airline this reduces the reputation of the airline and also misbehaving with customers also give wrong impact on them so to handle this Kingfisher airlines must be have some arrangement to handle this type of stuff. To do so experience staff is required and if any conflicts occur then handle them with care so that no passenger get upset and feel biased everyone should be treated same.

Competition also have a major issue because while competing with other Aviation airlines they have to consider so many expects that will affect the Kingfisher airlines because other airlines provide more facility and there low cost of the fare attracts the customers, But Kingfisher Airlines have to do some strategies so that they can keep their customers. Competition is not only with Aviation industry in India majority of people will go for the low cost carriers in India. Railways are also competitors because now Indian Railways are safe mode to travel and they cost very less as compared to airline. So to plan according to the budget of the airlines and equally economical to the people, trained CEO’s are required to do the job done well.

Owner of Kingfisher airlines Vijay Mallya also done one more thing that they only targeted the passengers that are willing to pay more than normal. They only need luxurious treatment, this is a good but in the time period of 2005 to 2008 is very easily earned money period for Kingfisher and Vijay Mallya also make so much profit then he invested money on others places like Cricket, Alcohol and many more. Due to the easy money Mallya expanded a lot their empire that is very difficult to handle and this is one of the reason which makes the Kingfisher into trouble.

Kingfisher Airlines have to take following step to make things good:

With lot of increase in loss of Kingfisher airlines and overdue of tax, fuel suppliers and airports and only few of the flights are working. If they want to again successfully run the business then promoters need to invest some money first then the Kingfisher airlines firstly clear the due of fuel and overdue of the tax with this money and then they should step up the ladder of success.

The morale of the employees should be considered first because they are the very important to the Kingfisher airline especially the staff and pilots they should never be dissatisfied. So Kingfisher airlines should must clear all the due of the salary of the employees because due to unpaid they have to suffer and their families also suffer with them. They can’t afford to lose quality pilots and if this will continue it may be happen that the plant should shut down in future.

Aircrafts used in the Kingfishers used now is very less and due to the mismanagement of the staff and between the owner leads them to failure because as I discussed earlier Mallya always have the direct control of the business and may be some factors that are left which are not considered by Mallya that affects a lot to the Organization. The perception of the Owner may be somehow wrong that is why the organization structure should be clear and should be made by various talented minds that help to success of the airlines.

Conclusion

Kingfisher is one of the leading and successful airlines in India. The reason behind the downfall of the airline is mentioned above and there are many other factors which also the reason behind the downfall of the Kingfisher airline. The organizational structure is mainly the major concern in the Kingfisher airlines. In starting the kingfisher is at its peak at that time period is the best time to expand the business but due to the huge benefits the staff and pilots and the expenses is also become more and more and to successfully manage it many talented person are required, no doubt they have experienced staff and luxurious treatment they give to the passengers but to organize the whole staff and the airline only Vijay Mallya is having the direct control on it and this occurs misunderstanding.

When the business is having great profit then we must have to more alert because when this happen the other competitors always try to get trouble so we can’t make profits. Like the other competitors of kingfisher is giving more facility and the cost of other airlines are also less than it is difficult to manage for Kingfisher airlines because they are the very luxurious and the cost of the flights are also high because due to the brand name they have to treat the passengers like they are treated previously and this is very difficult to handle but this can be handled by professionals so that the passengers not feel and change but this strategy gives benefits to the airline and various strategies are required to do it. Some of them are mentioned above but the organization behavior plays a great role to manage the people in the organization. This helps the staff and employee and higher status persons and owner to successfully run the business and maintain a healthy relation between them.

Introduction:

In this paper we will discuss the restaurant Industry in Saudi Arabia which is growing faster than anywhere else in the region; it is growing at a pace that is exceeding its infrastructure wwith different range of prices and classes, starting form as low as $1.00 USD and going up to $75.00 USD if you’re into fancy restaurants [1] .

The restaurant industry is very divers and large including: cafes/bars, full-service restaurants, fast food, home delivery and street stalls, all types of restaurants have a wide range of food specialization from ethnic, international, and local.

There are also three main types of investors: independent owners, international franchise, and local restaurant chains.

A restaurant chain is a set of related restaurants, typically with the same name in many different locations either under shared corporate ownership e.g. Al-Baik and Herfy. Typically, the restaurants within a chain are built to a standard format and offer a standard menu.

A franchise is a right granted to an individual or group to market a company’s goods or services within a certain territory or location. Some examples of today’s popular franchises in Saudi Arabia are McDonald’s, Subway, and Domino’s Pizza.

In order to analyze the attractiveness of the restaurant Industry in Saudi Arabia we will employ three different analytical tools, Porter five forces, assessment of the macro market environment known as (PESTLE Analysis), and SWOT analysis. Based on our analysis we will offer an advice to any new firm considering entering the restaurant industry in Saudi Arabia.

PESTLE Analysis

The effect of the Saudi politics on the restaurant industry

Saudi Arabia is ruled by the family of Al Saud who since the establishment of their kingdom declared that it is ruled by the Islamic law. The Al Saud family also affirmed that they are committed to supporting the economic growth and be part of the developed nations. This goal is very challenging to achieve because fundamentalist Muslims refuse the idea of globalization, this lay a moderate political risk on the regime. On the other hand, this political situation affects the restaurant industry positively because the restaurant industry remains the major uncontested method of entertainment among Saudis. Particularly, by law, all restaurants are required to have single-males section separated from the family section to adhere to the tradition and religious requirements.

Moreover, The Kingdom of Saudi Arabia is perceived as the leader of the Muslim world, because it is the home town of Makah; which Muslims from all over the world must visit at least once in their life time to complete the fifth pillar of their religion. This makes Saudi Arabia suffers from a tension in its international relationships mainly after the event of 911 because some of the western countries are holding the kingdom partially responsible for 9/11.

This political situation is one of the main strength of the restaurant industry in Saudi; with no cinemas or night clubs, eating out becomes the main source of entertainment for most of the population. There is an appetite for new restaurants that exceeds any other region in the world [2] .

The effect of the Saudi law and Regulation on the restaurant industry

The recent ruler of the Saudi Arabia, king Abdullah, is respected internally and internationally for his efforts to fight terrorism and his large amount of public spending on reform plans have helped the country to overcome [3] most of its economic obstacles.

The kingdom’s major step toward reform was the application for membership of the World Trade Organization (WTO) and making consistent legal changes to meet with its requirements, but still there is mistrust from the Privet sectors toward the government, because of the unnecessary bureaucratic practices and inappropriate regulations that are seen as burdensome for the competitive market. Some areas are over regulated while others are under regulated. It takes almost six months to register a company, and the company must give a proof that it has substantial sum of money to invest, not less than $10,000.

However, the regulatory changes made in recent years appear to have been of most beneficiaries to those Saudi companies which are seeking to expand through alliances with foreign investors [4] . Nevertheless, the law requires foreign investors to have a Saudi partner and the Saudi partner, individual or company, will have the majority of control over the business.

Over all, the legal process is very complex and financially risky whether you are opening a small business or a major enterprise. The government should amend these processes to encourage foreign investments.

The effects of Saudi economic on the restaurant industry

The Kingdom is experiencing accelerated growth due to recent oil price spikes. The positive effect has been a rise in per capita GDP from approximately $8100 (1999) to $9575, or 18%, by 2005. Combine this with the fact that the Kingdom has one of the world’s fastest growing populations (3.5% per year) and you are faced with an expanding market with good disposable income levels.

AC Nielsen research reports that the Saudi economy is expected to grow 8.7% this year, mainly fuelled by the high oil prices as well as strong private sector growth [5] Saudi remains the largest market in the entire Gulf. Many view Dubai as the showcase but Saudi proves to be the sales room and cash generator.

Due to fact that Saudi Arabia is a third world country, it depends on imported goods and technology, the government commitments to the economic expansion creates job opportunities for professional trained foreigners and depend on them to fulfill the country’s ambitious development strategies. According to HSBC Bank Saudi Arabia is classified as the second in the wealth of professional trained foreigners. Saudi Arabia is ranked twenty two among other countries in the tourism sector.

Moreover, Saudi Arabia hosts over five million pilgrims yearly from all over the world coming for Hajj and Ummrah. Hajj is one of the five pillars of Islam which all Muslims must perform at least once in their life time. The restaurant industry is one of the major Beneficiaries from such advantage.

Therefore, the government has been actively considering to expand what is believed to be billions of dollars worth of income in the tourism sector by attracting international tourists to the Kingdom’s historic sites, in the mid-2008, a package of new relaxed visa rules were released allowing many groups from Europe to visit the Kingdom with a group tourist visa, which years before was unheard of. This policy has created a new segment for the Saudi restaurant industry.

Also, the large number of foreigners, coming as workers or as tourist and pilgrims, with their ethnic background are considered the back bone for the restaurant industry.

The effect the social characteristics on the restaurant industry

Tradition and religion encourage Muslims to be hospitable and sociable. Inviting guests and friends to banquet in their home is the norm in Saudi Arabia.

In Saudi Arabia Segregation between opposite gender exist in most sectors of public eservices, schools, universities, banks, this segregation unlocked job opportunities for large number of Saudi females. In the last few years it became easier to entertain guests and family to a restaurant for the busy working females or even have the restaurant food and staff to entertain them at home.

Dining out became a habit among all social classes in the Kingdom with the lack of other entertainment venues due to religious issues. Therefore the trend of eating out is constantly growing among them. [6]

This social characteristic will have a blooming and flourishing effect on the restaurant industry in Saudi Arabia where the main entertainment is going out restaurant.

Perhaps the most pronounced feature of the demography is its young population where more the 59% are under 24 years of age. And part of the Saudi government or reform is to develop its workforce; to achieve this goal the government sends over one hundred thousand young students to peruse their higher education in highly developed countries every year. These large numbers of young people live abroad for almost five to seven years comes back with food and restaurant likes that they adopted during their scholarship. [7] This opened the door widely for international franchise in Saudi Arabia Some of the franchises that are currently present in Saudi Arabia, McDonalds, Hardee’s, Burger King, Popeye, Chilies, TGI, Fuddruckers, Pizza Hut among many others and are very popular among this young population along with foreign workforce, tourist, and pilgrims.

The effect of technology and the environment of the restaurant industry

The last of the two macro marketing environment forces are the technological and the environmental:

In Saudi Arabia Technology in the restaurant industry is not limited to basic kitchen appliances and tools. However, one may not expect some complex equipments are used in the restaurant industry. Many restaurants are leading the way in regards to credit card processing and point-of-sale technologies, introducing new ways to serve their customers and increase the overall convenience of the dining experience. Of course, restaurants chains and franchise are the main benefactors of this development in communication [8]

In Saudi Arabia there is no significant awareness from the government or most of the population to the environmental issues. All the restaurants that uses recycle paper or green energy are mostly international franchise applying their Owen corporate policy as part of their responsibility

Porter’s 5 Forces Analysis

Threat of New Entrants. The restaurant industry is the easiest to enter basically anyone who can cook, with the minimize capital amount can enter the business. Barriers to enter this industry are mainly in the bureaucratic regulation that might take time but this is not considered a serious barrier.

Power of Suppliers. While there are plenty of food supplies, but they depend on imported material because Saudi Arabia is not an agricultural country. The import of food and foodstuffs are estimated to exceed $7 billion annually and the Kingdom remains the leading market in the region. Except for date and milk all other raw materials are imported. There are big numbers of suppliers and prices are controlled by the government. Only international food chains franchise might be obliged to buy its raw material from a certain supplier.

Power of Buyers. The balance of power is shifting toward buyers. With so many restaurants the competition is very high. Buyers are always looking for the best quality and price. Going to restaurant is not an essential; people are always ready to try something new. With Variety of products to choose from, local, ethnic, and western couple with intense competition lead buyers seeks lower prices and better services. Disposable income levels and an expanding shopping mall culture are assisting this growth

Availability of Substitutes. Substitutes for the restaurant industry in general include alternative form of entertainment like cinemas or night club. The available entertainment substitute is the shopping malls, where people will go shopping, or window shopping. Most fast food chains are showing positive growth and are ever present in all the new shopping malls

Competitive Rivalry. Even though there are no figures revealing the size of this lucrative market, a high industry growth rate is intensifying the competitive rivalry the presence of so many available substitutes are a particularly challenging situation for some firms

SWOT: Strengths – Weaknesses – Opportunities – Threats

The Saudi restaurant industry is weak in economies of scale and labor productivity. Its strength is the ability to attract huge capital and labor with it openness to the world market. The restaurant industry is showing significant growth, on the other hand, this open market has intensified an open competition. The diversified culture of Saudi Arabia is the key to exploit ‘Economies of scope’. Also, exploiting the economies of scale is also an opportunity.

The consumer preference for differentiated and healthy products is also another opportunity to exploit in enhancing the economies of scope. Although, the anticipated low population growth in the future could be a major threat as it would decrease the quantity of demand coupled with the increase in the retail chain the significant increase in small households and working women will create new opportunities for the restaurant industry.

Conclusion and recommendation:

In this assignment we carried out an analysis of the restaurant industry competitiveness in Saudi Arabia by employing three different analytical tools, PESTLE Analysis, Porter Five Forces, and SWOT Analysis. Based on our analysis we concluded with the following findings and advices to any new firm considering entering the restaurant industry in Saudi Arabia.

The strength of the restaurant industry lies on its ability to attract huge capital and labor with it openness to the world market. The restaurant industry is showing significant growth faster than anywhere in the world.

Many factors have contributed to this fast growth as such as the political, economical, and low labor market and other socio-cultural factors.

The economical and political outlook for restaurant industry in Saudi Arabia is very encouraging, government shows commitment and support to economic growth which is reflected in its double-digit increase in government expenditures on many aspects that are related to the restaurant business.

Furthermore, currently, the government economic plan emphasizes the strengthening the growing private sector business opportunities with focus on increasing the national and foreign investments as public spending has increased by 15.8% the government has increased the budget for new projects by 36%.

One of the most promising aspects for the restaurant industry is the social changes in Saudi Arabia. For example, the role of females in the social and economic life is dramatically changing as women are now allowed to enter the work force and have huge impact on the purchasing power and certainly a change in women’s lifestyle that is favorable to the restaurant industry.

On the other hand, the legal process in Saudi is very complex and financially risky whether you are opening a small business or a major enterprise. The government should amend these processes to encourage further foreign investments. Also, the Saudi restaurant industry is weak in economies of scale and labor productivity.

Based on the above findings, we strongly recommend and encourage any firm to enter the Saudi market keeping in mind the following points:

The restaurant industry is highly competitive in terms of price, service, location, and food quality and is affected by changes in consumer trends, economic conditions, demographics, traffic patterns, and concerns about the nutritional content of foods.

shifting dietary preferences among consumers in favor of alternative foods can open the doors for niche market

The growth of the restaurant industry is expected to generally stay the same over the next few years and it can be considered a blue ocean.

The restaurant industry is affected greatly by globalization and it will continue to be.

THE RESEARCH PROCESS

Introduction

The research process is the steps included or needed to conduct a research from the beginning to the end. Research that have been identify should be carried out in a deliberate and systematic manner in order to produce a substantive besides useful outcomes (Weaver and Lawton, 2006). The specific way in each of these stages and their attendant sub-stages is operationalized will wary from project to project (Weaver and Lawton, 2006). Furthermore, research also is an extremely cyclic process, where the review of earlier work might be necessitate for the later stages (Leedy and Ormrod, 2001). Therefore, it can be difficult to determine on where to begin or where to end the research due to its cyclic (Leedy and Ormrod, 2001). According Weaver and Lawton 2006, there are basically seven steps in the research as shown below.

Step 1: Problem Recognitions

According to Leedy and Ormrod, 2001, a research begins with a problem. Therefore, the first step in any research process or before conducting a research is to recognize the problem or issues that interest the investigator (Weaver and Lawton, 2006). In tourism-based corporation, the core issues that require research are reduced patronage and declining market share (Weaver and Lawton, 2006). From a destination perspective, additional concerns may be harbored about negative community reactions to tourism or declining environmental conditions that will affect the industry (Weaver and Lawton, 2006). However, methodological bias of the researcher might dictate the problems As we know, before starting to conduct a research, at first we should come out with a question because all of the research that begins with a question. Besides that, curiosity of a researcher is often used as a foundation for scholarly inquiry. Before start to conduct a research, the researcher should know the problems and broad issues that interest them to conduct a research. Researcher should clearly understand and clarify what they want to know to conduct the research. After problem has been recognized and the researcher understand what they want to know to conduct the research, it will makes them easier. Researcher can ask themselves question on what they want to know actually based on the research that will be conduct. By this, it can help them to conduct a better research because they have the purpose for conducting the research. After problem has been recognizing, the researcher can plan or create a useful framework for clarifying or contextualizing the broad problem. For example: “if you are interested in finding out about how many students will take the opportunity to involve themselves in the sports events in school”? You might need to pose out a question that “what is the advantages of taking part in sports event in school?” Researcher should understand what they really want to find out by this topic. They should indentify what problem, concepts or keywords in this question on what they want to know by doing this research and then plan their framework well before start to do their research.

Step 2: Question formulation

After all the problem and topic that researcher identify or broad problems that have been selected, research questions must be focused to prevent that time and resources are not wasted on tangential avenues of investigation(Weaver and Lawton, 2006). Furthermore, hypothesis may be expressed when question formulation. As a basis for question formulation, it is helpful to clarify that the level of investigation that is warranted by the problem and the resources of the company or destination that are available. There are four levels of investigations which are description, explanation, prediction and prescription. All of this level will be using based on the research that will be conducted by the researcher.

The first level if the investigation is description (Weaver and Lawton, 2006). Description it is the most basic level of inquiry. For example, the managers of a particular destination are concerned that the local people appear to be increasingly hostile toward visiting tourists. The logical first step in addressing this issue is to describe the actual situation, by asking questions such as what are the attitudes of local residents towards visiting tourists.

Next level for the investigation is explanation (Weaver and Lawton, 2006). Explanation is the decision whether to or not to proceed to this level of investigation, which is to explain the resultant patterns is often constrained by the availability of resources. However, the decision should be based on whether one or more serious problems have been revealed after the research process has been completed at the descriptive level. For example, the perceived hostility of residents involves only a few isolated incidents instigated by known troublemakers, and then there is probably no compelling reason to precede any further investigation. But, if the suspicious of emerging hostility have been confirmed, and the parameters of the hostility are identified as being broad-based, then the explanation is necessary towards its resolution.

Level three for the investigation level according to Weaver and Lawton, 2006 is prediction. Prediction means once a plausible explanation for a problem is found out, the further investigation is to predict the problem’s consequences if no remedial measures are taken. As with any prediction involving humans, this stage of inquiry will be speculative, but it is possible to engage in intelligent and well-considered speculation that will inform the final stage of prescription. Example would be like asking what will happen to the local tourism industry if no steps are being carried to address the hostility of young adults towards tourism.

Lastly, the final stage of the level of investigation according to Weaver and Lawton (2006) is prescription. Prescription is the culmination of research process, involving the consideration of various solutions to the problems. If the predictive phase reveals that the above situation is highly volatile, and that the community will endure great suffering if no correction action was taken, then it is essential to proceed with prescriptive phase.

To summarize, the intervention or the actions that should be taken to ensure optimum outcomes for the company or destination, is a core component of the process in management and in applied research. Appropriate solutions or prescriptions will only emerge as a result of the knowledge that is obtained through preliminary research at the levels of description, explanation and prediction (Weaver and Lawton, 2006).

Step 3: Identification of research methodology and/ or methods

Next step of the research process is to identify the methodologies that will be use to conduct the research that the researcher already selected (Weaver and Lawton, 2006). In the other words means identify the specific research methods that will be best allow the project or research to be proceed, and normally all this probably will based on the problem that have been identified and the question set for the research. For example, in the descriptive phase, the investigators may undertake quantitative surveying in which resources, time; cultural and social context will be taken into account. Whereas in the explanatory phase, the researcher will engage in qualitative, in-depth interviews to identify the reasons for revealed attitudes and behavior. While for prediction level, the interviewer has a number of options that can be pursued in conjunction with each other to see whether the different methods yield the same results. As shown in the above example, the usage of all the techniques in the same research process also can be known as methodological triangulation. Furthermore, If all of this four methods for the research reveal the similar outcomes, it will gives the researcher high degree of confidence that the real situation of their research that they want to be conduct has been identified. Moreover, it is likely that each of the method will yield its own unique insights into this situation, thereby strengthening the knowledge base that is obtained from the research.

Step 4: Data collection

After the most appropriate have been identified, the next step of the research process can be proceeded (Weaver and Lawton, 2006). In a former case, a sample of data collection mostly is randomly drawn from the population and each of the members of the population has the equal probability to be selected as the sample for the data (Weaver and Lawton, 2006). Researchers will simple drawn out all the names of those will be involves in the research by using the random number tables to prevent biases when collecting the data. However, researcher also will select a large enough sample so that inferences can be made about the entire population. According to Neuman 1997, it is advisable that the sample should be at least of 30 per cent of the entire population to make sure that it will achieve the same effect. In the data collection, researcher commonly will practiced the non-probability or convenience sampling in the qualitative research and deliberate selection of certain cases to build the sample for the research that will be conducting. (Weaver and Lawton, 2006)

Besides that, for the data collection, once the sample size and procedure of selection for the research have been decided, the actual or the process of the data collection can be started and there is few factors that need to be considered at this stage such as consistency for the result in as short a time period as possible, timing of the interviewing or observation for the research (Weaver and Lawton, 2006). The reason is that it can save the cost and resources for the research without wasted and the collection of the data will be more accurately as well. Theory will be developed from the data gathered and analyzed by the researcher (Neuman, 2000). Furthermore, each research that will be conducted must use an appropriate data collection technique based on the research methodology that has been chosen. The researcher might also involve in pilot study or test, in which the researcher will conduct a trial test of the data collection tools and analysis by using the same sample of the population used in the final study (Jennings, 2001). Besides that, once the sample size and selection procedure have been decided, the actual data collection can be started (Weaver and Lawton, 2006).

The main goals of both quantitative and qualitative studies are to maximize the responses and the accuracy of the research (Walonick, 1993). The researchers will also validate the data collection process When others data collection service are being used, by contacting a percentage of the respondents to verify that they were actually being interviewed ( David S. Walonick 1993). Not only that, the checking process for inadvertent errors in the data also involves data editing and this process normally required a computer to check for the out of boundaries data.

Step 5: Data analysis

The data analysis is the next stage after data collection, which is a stage that attempts to answer the related research questions by examining and assessing the collected information to identify patterns and meanings (Weaver and Lawton, 2006). At this stage, filtering and organizing the database to eliminate the invalid responses usually will be involves to get a better result for the research. Next (at least in quantitative research), it is follow by the coding and entering of the data that already been collected into a computer software system such as SPSS (Statistical Package for the Social Science) facilities which have the further classification and analysis (Weaver and Lawton, 2006). Actual analysis of the research can be undertaken after all the data already been “cleaned” to eliminate error in the coding procedure. According to Weaver and Lawton, 2006, the most basic analysis in a qualitative research is to record a simple descriptive statistics such as means, frequencies and standard deviation besides test also can be use when in a more sophisticated level. Researcher need to be open to the data to ensure that the data that they collected do not “force” the data (Glaser 1992). According to Neuman 1997, qualitative data analysis includes organization of the same categories as well as the relationship development and process models based on a constant comparison of the text-based data. There are 3 aspects of data analysis which is data reduction, data displaying and drawing conclusion (Miles and Huberman 1994). The relationship between different variables and groups can be examined or determined simultaneously by using multivariate technique, such as analyzing the factor and the multidimensional scaling. Level of sophistication depends on the nature of the research question and the data’s characteristic collected by the researcher (Weaver and Lawton, 2006). In a qualitative research, the sorting, comparing, classifying and synthesis of the collected information can be involves in analysis for qualitative research (Weaver and Lawton, 2006).

Step 6: Data presentation

In data presentation, the results of the analysis should be presented in the way that can be easily understood by the target audience. When preparing data for presentation, make sure that you are choosing the key points of the research (Gayle Jennings 2001). The most common devices that use to presenting data is by using tables and graphs but great care also should be always be taken to avoid complexity and clutter particularly if the intended audience is non-academic (Weaver and Lawton, 2006). The reason is that to prevent that audience did not understand what are being present. Furthermore, researcher also can use maps for their presentation because maps are extremely efficient means of presenting spatial information if being constructed properly (Weaver and Lawton, 2006). According to Jennings 2001 Power point presentation also can be use to present the data but there is some consideration when using it to presenting data such as slides should not overwhelmed with text, text is easy to read, try not to use colors that are hard to focus on or gaudy, not to over use different font and different style such as italics, bold, use an infra-red or timber pointer if need to indicate something, do not turn your back to audience and check out the slide is in the correct order.

Step 7: Data interpretation

The final stage of the research process is data interpretation, in which the meaning from the research results will be extracted (Weaver and Lawton, 2006). This is the stage where important implication of the research result are considered from theoretical and/or practical perspective besides in this stage, researcher also will consider higher levels of investigation which means the researcher will revisit the previous stages(Weaver and Lawton, 2006). Data that been interpret maybe will be influence by the methodological and other biases of the researcher. The important of the effective interpretation at the specific or broad level cannot be overstated since leads to translation of research results into policy decision and other outcomes that are important to the target audience (Weaver and Lawton, 2006).

The words tourism and terrorism exist at either end of a continuum of quality of life. The word tourism means living happily, enjoyment, and relaxation, while terrorism means feeling of death, destruction, fears and panics every where. According to Beirman (2003), “tourists are primary concerned with travelling to the destination satisfying their desires with minimum complications, threats to their safety and wellbeing “, while on the other hand Gilham (2001) said, “physical threat or serious disturbances to one’s plans are suffer to reduce the prospects of a tourist destination or tourist firm”. In past decade terrorism has very severe impacts on the travel and tourism industry than any other industry. The main reason of this may be because the basic objectives of the terrorist groups are to spread fear, as a result the basic safety and security of people threatened. According to Abraham Maslow (1943) the Hierarchy of needs, he said that human nature never satisfied when they have met their basic needs for safety and security. When they are able to satisfy their basic needs, then they attempt to satisfy their self actualisation needs such as better life, travel and tourism. According to Essner 2003), “the psychological impacts are enough to have severe impacts on tourism. The fear of terrorism is irrational, because in terrorist attack chances of being killed are very little and security environment has demonstrated its negative impacts on tourism in many top destinations around the world.

Three industries are dominated in 21st century, telecommunications, Information technology and tourism. According to World Tourism Organization 2008 report, tourism provides employment over 100 millions around the world. Tourism is an important economic sector for UK economy and according to BBC 2010 report; domestic and overseas visitors put an ?115 billions a year in UK economy. The direct contribution in the UK economy was ?52 billion in term of GDP which represent 4% of UK economy. Tourism also provides 1.36 million jobs in 2009 to UK workforce which is 4.4% of total work force. UK is the world’s sixth largest international tourism destination in term on number of tourists, but after September 11, 2001 and July 7, 2005 incidents this industry was badly affected. According to the LCCI (2005) report, it has been estimated that the fall in tourism could cost UK tourism industry over ?300 millions.

In this competitive age, the business environment is changing dramatically. Terrorism is the biggest threat to tourism industry because travel is susceptible to the incidents of terrorism. When people travel they always avoid hazards, so for tourists safety is the major concern. During the past decade especially after September 11 2001, there are number of events which have had significant negative impacts on UK tourism. The correlation between terrorism and tourism is undeniable in the era due to industry strength and tourist places are the ideal target for terrorist to create large amount of economic and social disruption in the country. In UK terrorism can be seen in substantial part, as a result of this backlash to the tourism industry. There are number of definitions of terrorism, in the world of Alexander et al (1979) “terrorism is a threat or use of enforcement and inclemency to achieve a political goal by means of intimidation fear, and coercion”. In the present world context, the European Union (2001) define the terrorism relevant to international business in the following words. “Terrorist offences are certain criminal offences set out in a list comprised largely of serious offences against persons and property which, given their nature or context, may seriously damage a country or an international organisation where committed with the aim of: seriously intimidating a population; or unduly compelling a Government or international organisation to perform or abstain from performing any act; or seriously destabilizing or destroying the fundamental political, constitutional, economic or social structures of a country or an international organisation”.

According to U.S Department of state (2002), “terrorist select businesses (e.g. tourism places) for attack compare to other targets”. The most kind of attack is bomb blast, although armed attacks and kidnapping are also some kinds of terrorist attacks. According to Council of Foreign Relations (2002) reported “the majority of victims in terrorist attack are civilians”. The relatively large number of tourists may not prepare to face these kinds of terrorist attacks. However the scenario has changed as it was at the time of terrorist attack in 9/11. Kunreuther et al (2003) cited that during the days of terrorist attacks in 9/11 a common feeling came into mind of people that it could be me. But with the passage of time this may give way to may be it will not ‘me’ next time. This kind of behaviour is more common now a day in south Asia. But it is a common thinking that it is extremely easy for terrorist that to attack any where in the world. Even in low cost and low tech attacks, terrorists achieve to disrupt the tourism industry.

Terrorism has deep history science the cold war but this issue become most salient after terrorist attacks in September 11 2001. This incident affected the UK and international tourism industry in various ways. On one hand the world tourism industry was affected financially, the other hand it suffers due to legal and security issues. The international tourism industry between countries was most seriously affected due to security and safety concerns and legal issue. Especially UK, US and other developed countries were compulsion to protect their territory and people at any cost. Tourism industry in UK and USA found themselves floundering financially in the months after the terrorist attack on world Trade Centre, while rest of the world tourism industry also lost millions of dollars. According to U.S department of state (2002) more than 3000 people of different nationalities were killed in the terrorist attacks only in the United States in September 11, 2001. The attacks were the conspicuous example of terrorism on global level. According to the overview of European commission (2001) this was the one of the major event in the past decades which diversifies the viewpoint and outlook of people around the world. Terrorism affects both the long term and short term perspectives of the businesses around the world. Czinkota (2002) cited that terrorism influenced long term karma of entire industries, for example tourism, retailing and manufacturing industries.

After the September 11 terrorist attacks many international tourist destinations have badly affected legally because countries have introduced new laws for foreigner tourists e.g. strict visas requirements, security check and criminal record check etc. UK government also introduced strict immigration law for every one who wishes to come UK for tourism in the effort to prevent further terrorist attacks. The new terrorist laws restricted the tourists for freely travel across the UK borders and require by security department to keep proper track of their activities. The anti terrorist laws have made very complicated for tourism industry to conduct its business activities across the international borders as a result many countries tourism industries have financially struggled. Another major issue that affect the international tourism industry is security and government have to invest huge amount of money to improve both internal and external security. The security is most important because terrorist target hot spots to achieve their targets.

There is not a vast existing literature which shows the relationship between terrorism and tourism management theories, and the lack of presence of research literature is absolutely visible on the relationship between terrorism and tourism management, which elaborates constructive techniques for tourism industry in the presence of phenomena of terrorism. Terrorism has capacity to create atmosphere of fear and can be intimidate industry in number of ways. This threat of terrorism attacks poses a continuous atmosphere of risk for the tourism around the world. This risk itself creates extension for treatment of risk in management theories. The majority of management literature theories adopt term ‘uncertainty’ as a factor of unpredictable environment which may influence the performance of firms in certain ways. The environment effected by terrorism also has a factor of unpredictability in it. This study is another attempt to research and investigates impacts of terrorism on the tourism industry in UK and we will also discuss different approaches for reducing and handling the terrorism threats.

Research aim and objective:
Research Aim:

This aim of this research is to analyse and explore the effects of terrorism on tourism industry in the United Kingdom after September 11 2001. The second part of my research is to critically analyse and recommend the most appropriate strategies for tourism industry to deal with the terrorist threats or scrutinize the different strategic views to avoid and minimise the impact of terrorism on industry.

Research Objectives:

This research has the following individual objectives:

Critically analyse the impact of terrorism on individual organization and the whole market.

Evaluate the managerial performance in organizations, before, during and after the happening of the terrorist attacks and in uncertain environment.

Research Questions:

What is terrorism and why terrorist target business?

What are the effects of terrorism on business?

How to development strategy for managers or adopt a better approaches to deal with above mentioned issues?

Abbreviation and terminology:

Uncertainty: specifically mean the unpredictable environment; it is unpredictable when next terrorist attack will occur.

Risk: mean threat; internal and external threat in business environment which may affect the productivity of organisation.

But most of all travel plans are made to develop an area not sufficiently focused on the development of local human resources. That is increasingly isolated from the human resources of tourism development is carried out due to their inability to perform. Tourism impact member or a significant impact on society, particularly to local residents, before holding an event should take into account the effects of these events on economic and socio-cultural community.

Among the benefits of hosting the event of certain individuals. Example of hotel and resort operators, food and beverage business and craft vendors. When the sports held their gains from the sales will increase because many tourists would come to visit shop. In addition they can promote interesting products that have not been promoted by the dealer – another dealer. This will give opportunities to people to find out their sales results and the stability of the economy rose due to foreign currency exchange rates and thus can increase the balance of payments. With the proceeds from the government to generate economic profit from the arrival of a large population.

The role of the tourism event of the obvious aspects of the development of a tourism destination. Organizing events for local causes many to take the initiative to venture into business small – or open the talent of the individuals that had been extinguished in the self. In addition to promoting tourism events for local communities to engage in commercial businesses such as souvenir.

Making a traditional food that we can show it to tourists – tourists who are interested in trying the food. It is clearly evident to the tourists who have not been trying to eat that is not in their country. For them there is a pride in themselves and serve as a memory. Organization of events – events to encourage international investors to invest in a destination. Because investors are interested in expanding income, because the destination has the potential to be developed or the capacity to be developed for the residents of flax and high member to investors that they are so lucrative for-profit business in the future.

This was evident in 1990; the tourism development program is increasing awareness of its importance to the country because the existing strategic tourism events planned for the Province of Novel Scotia (Get, 1997). Travel the international-class sporting event to benefit many local communities due to widespread support from the international. To get a response from the tourists they must play a key role in attracting tourists to an tourist potential of sporting events and sports equipment in order to complete attractive to tourists. With the efforts of the sport can improve the economy. Because the requirements and needs of tourists should be introduced for sport activities or packages that are appropriate to the target market.

Sports and tourism intertwined as an important topic since 1998, so that in 1999.Infrastructure construction and the arrival of more volunteers to help the economy in the region and to reduce the cost of development. A total of four twenty two percent of the tourism events around the world are sports Sports Tourism International Council on tahun1994. For a developing country hosting the event is an opportunity to help promote economic growth and social development and enhance the cooperation between many countries.

Sports tourism funded from the company – the international corporations that maintain high standards of corporate governance is good business is very important to help strengthen the brand for the organization or a union as well as to enhance a healthy culture of corporate responsibility. Recommended the following measures to be implemented to build the confidence of investors is improving transparency and regulatory environment, In addition to helping the industry to create rules that increase the consistency of government policies to improve the dissemination of economic information. In the administration of sports tourism is good not only a corporate body of law abiding, but finding the correct ethical approval. Therefore, companies need to make the reporting of a State capable of development as an effort to improve the governance of a good business to enhance the economy of the country.

There are a few factors that lead to views of local communities on tourism activities is important is that local communities have a connection and relationship of the foreign tourists. When travelers receive good treatment from the local, it will have a positive impact on the satisfaction of tourists who visit. Local community is the source of the taxpayer and directly benefits the government. Because the income earned from the tourists to give a clear improvement or impact the economy. In addition, a State can reduce the burden on any society when the economy becomes more member benefits.

In conclusion, sports tourism continues to be the focus of foreign investors in the future due to political stability and implementation of business-friendly environment of inspiration. In addition to plant model to attract investors because of disputes are rare. This is definitely sports tourism to give effect to the good example of a good exchange of tourists to boost the economy of the country and improved the level of good and Development. Therefore the government should be is smart design of the first set before running the sport is not valid for the problems of the tourists. For their arrival to give a point of pride for them, particularly Olympic sport.

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But are governments important to tourism, and how do they become involved with tourism management? What are the effects on tourism-has it led to success or failure?

Governments and tourism-Tourism needs favourable conditions to thrive-these are stability and security,a sound legal structure with provision of vital services and necessary infrastructure(the roads,water supplies,a favourable environment.)All these the State is able to provide.It is the government who has the influence and political clout for decisions and course direction.The degree of involvement and commitment are most important here.These two factors exist with varying degrees of effect within each country on the globe.PSM or public sector management involves action implementation and policy direction through the government.The principles of accountability on behalf of the public having the necessary support of the legal framework and political system prevailing.

Why governments intervene in the tourism sector-First and foremost if there is no monitoring of tourism activity there could occur sudden deterioration of the environment with consequences to the local population.Both facilities and infrastructure as supplied by government contribute as enabling factors with positive benefits of the populations well-being and provision of increased tax revenue.Jobs, also a very important issue are thereby able to be created.See Guide for Local Authorities on Developing Sustainable Tourism WTO(1998:29).Much of the developing world has embraced the immediate benefits to its economy by the pursuit of such investment.Critics would point out the potential for damage by alteration of the locality’s social and cultural fabric.There are also leakages whereby the revenue generated is not experienced by the locality it gets diverted elsewhere to overseas investors with a stream of cheap labour coming in to fill potential seasonal employment occupancies for the locals.

Politics tend to deal in wider frameworks and this is not alwaysin the best interests of the people.The Franco regime of the 60s utilised tourism for political acceptability.France has always sought to the position of the welfare state on behalf of the poorer members of its society.It is similar to recreational tourism most evident in the Soviet era where cultivation of a workers climate is applicable to the spas,resorts and holiday camps.The government of the UK expounded the potential of the tourism industry for being able to accommodate to large numbers of unemployed during the 1980s when unemployment was at a high level.A transnational body such as the EU has consistently supported financial aid for the creation of infrastructure in the outlying regions of the world.Aid is rendered by the more wealthy nations to those who are impoverished to generate immediate recovery and wealth the Pacific Islands being a case in point.

Government intervention and tourism performance-The tourism industry is a very complex category and requires proper coordination encouraged to achieve positive results.It is pointed out that with extensive government involvement there is inevitable bureaucratic regulation and stiflement this deterring would-be investment from the private sector.Government intervention is necessary where there is present seasonal dependency and the local economy cannot be kept running all year round.

The political complexion of local councils is very variable interest in tourism is likely to wax and wane.Government is concerned with obtaining as much quality statistical data as it is able so as to understand how these local economies function and so be able to assist more effectively but still is a very fragmented process.Resolve of conflict directly concerns government intervention;and similar to politics is concerns a balancing strategy between the tourism industry and disenchanted opposition more often than not the local residents themselves.

Strategic objectives are more likely to be pursued by government Jeffries(2001) has pinpointed two viewpoints.Firstly redeployment of tourist visitors taking into account the seasonal variation patterns and secondly geographical redeployment in steering tourism flows elsewhere.It is argued for the first strategm that extension of the tourist season with an improved range of visitor and domestic attractions offered during the low season there will automatically occur increased business interest and therefore activity.Employment growth might well occur rather than sustaining a low seasonal level.The second strategm concerns direct intervention and an example of this would be the Languedoc-Rousillon coastal region to the south of Montpellier.A certain number of bespaces were guaranteed for the resort area and improved throughout the 70s and 80s.In this case regional development has occurred to assist an undeveloped region.

Locally in the UK the saturation effects experienced from an influx of tourism has prompted definitive measures to contain it;examples of this would be Stratford-upon-Avon,Cambridge with York and Canterbury

1.1 Different types of hospitality products and services

As an industry, hospitality industry can be considered as a major employer in modern globalized world. It may include services such as foods and tourism. Therefore, it can be considered that the industry may more susceptible for economic fluctuations when compare to the other industries.

The industry may consist of two major areas such as lodging and the entertainment. Lodging can be identified commonly in hotels, motels resorts and the places like inns. Clubs together with bars can be considered under entertainment.

When considering the customer support as a service, it may include the traveling facilities such as airline ticket booking. Involvement of the information technology is identified as a developing trend in the industry. It may act with travel technology.

Because of the trends of demanding are frequently changing, the on- time changes may highly effective. For an example, for the developing countries like Sri Lanka with a unique aesthetic value it may be highly effective for the industry to run based on that. It is known as the concept of eco-hotels. To implement that, the cultural values also can be in cooperated. For an example, instead of DJ dancing and night club parties cultural dancing and folk songs can be introduced together with cultural foods.

1.2 Different patterns of demand

When considering the different patterns of demand in the industry, three major patterns can be identified depending on the different sources.

Demand based on institutional sources

Demand based on recreational sources

Demand based on transit sources

Institutional source based demand pattern may rise from commercial enterprises, educational institutes and other government and non government bodies who incorporated with the economic sector (Medik and Ingram 2001).

Historical, aesthetic beauty, cultural and extraordinary attractions can be considered under the demand pattern based on recreation. For an example, Taj mahal in India may attract thousands of tourists and five star hotel Deedar- E – taj plaza may providing facilities for them.

Small individual groups who are expecting a break during their long journey can be considered as the demand based on transit sources (Medik and Ingram 2001).

1.3 Different characteristics of the tourists

Depending on the customer preferences and their requirement, tourists can be identified as four segments such as, leisure travelers, business travelers, group meeting travelers and other travelers. People engaged in commercial, NGOs as well as in government institutions may include in this group. Their requirements may be based on the availability of space in relation to advanced conference rooms with multimedia rather than lodging. Leisure travelers may include the people engaged in vacations or sporting events or other personal visits. Most of the time, their major need may be comfortable lodging facility at an affordable price. But, the group meeting traveler group may include both business and leisure travelers. Therefore, their requirement may be in between the lodging and the other value added facilities. The people who may not include under the above three groups may include in the group of other travelers.

1.4 Factors affecting average spending power in hospitality businesses

The price in relation to food and beverage may be more critical and complex in the hospitality industry compare to the other industries. Therefore, it is important to consider the concept of the average spending power which is known as ASP. It is more related to the pricing concept. ASP may have the potential to influence during the whole process in relation to food and beverage. It can be affected by different factors such as menu design, type of the outlet.

For an example, for the hospitality services possessing long hour work may tend to have higher ASP than others unlike snack bars like services with shorter opening hours.

Chapter 2
The product development within hospitality environments
2.1 Stages of Hospitality product development

Product development can be identified as the assessment of product and services to recognize the chances of improvement, profit as well as the customer satisfaction. This process is important in modification of existing products to cope with identified opportunities and the modern marketing trends. It may provide the improved quality for the product and the customer satisfaction. Product development process should be consisting of knowledge on the product weaknesses and strengths, modern marketing trend which is facilitated by the advanced technology.

According to the Kotler’s principal of product development, three stages of product such as core product, augmented product and tangible product. Basic level of the every selling product is known as the core product. For an example, Hilton hotel resort may provide well appointed rooms, excellent dining and the other services for their customers.

Augmented product may include the extra services and value added services which may provide for their customers. For an example, gym facilities, spa facilities and the other packages relevant to the different sports such as Golf and Tennis (Kotler, 1996).

Tangible products can be identified as the products that can be physically feel by the customer. For an example, restaurant of Intercontinental Sea Bq provides sea foods for the customers.

According to the novel product development process five major steps can be identified.

Generation of Idea

Screening process

Evaluation of Idea / Development of Concept

Product development / Business Analysis

Commercialization process

Idea generation process may be a result of a market research. It would be the confirmation of a requirement of a product based on existing consumer need. In the screening process, ideas may be collected from media, potential customers and employees. By, using those ideas, the expected competition for the product may justify according to the market trends. Revenue, cost and also the expected profit may identified in the idea evaluation step. Market research may be important in relation to this step. In this step, the expected first customers may describe theoretically. In the product development step, physical production and manufacturing process may do and the selling price may also determine. Not only will that, testing of the product also be done. As the last step, the production campaign process may be done in the commercialization process.

2.2 Features contribute towards the customers’ perception of products and services

In modern globalized economy, practically it may be hard to differentiate products and services compare to the earlier times. Therefore, generation of substitute products and services may be a problem in any industry. As a result of this many institutions focus on the price reductions to cope with their rivals in order to dominate in the market.

When considering the customers’ perception on products and services, it can be influenced by several factors. According to the results of the research done by Hellofs and Jacobson (Hellofs and Jacobson, 1999) the impact on the market share on the customer perception of a product may generate both positive and negative effects.

When considering the purchasing process, the customers’ attitude can be considered as the function of quality, level of satisfaction and the value of the product. The past experience of the customer, the information which is provided by media may facilitate the trialling process of purchasing. But, after the purchasing process the perception regarding the product or service may be affected by the quality, satisfaction and the value. Therefore the optimum level of those three factors may be always acceptable for customers. Focussing on those factors required to be at maximum level. The value of a good or service is commonly related with the price. But, the excelled quality of product or service may lead the customers to pay more for that product or service.

2.3 Opportunities and constraints affecting product and service development

When considering the opportunities affecting the product quality and service development, several factors can be considered such as, location of the industry, adequate entrepreneurship,

availability of labour force. Location can be considered as one of the important factor in the hospitality industry. When the industry is following eco- hotel concept, it is important to more focus on aesthetic beauty such as sea, forests and lakes. Entrepreneurship is most important in relation to the capital in the hospitality industry. Availability of dominating business partners may play an important role in the product and service development. Availability of labour force is important in relation to the customer service. Customer satisfaction is vital in the hospitality industry like in all the other industries.

2.4 Different merchandising opportunities for hospitality products and services

Because of the globalization process, there is a developing trend to investors to invest their money at international market. This may increase the frequency of business travels all over the world. Therefore, it may be beneficial in relation to the hospitality industry. Most of the business travelers may expect high quality of service depending on their purchasing power. Therefore, there would be an opportunity for the hospitality industry to market their products and services also with value addition. Not only that, with the improvement of country’s’ economy similar effect can be expected in relation to hospitality industry.

Chapter 3
Pricing and profitability concepts within hospitality operations
Different methods of pricing and factors affecting the revenue and profitability

Appropriate pricing, accurate and complete quotations, selecting the terms of sale, and choosing the correct payment method can be considered as the four critical fundamentals in marketing a product or service in relation to international market. Among those four, pricing is considered as the most important one to be considered.

Different methods of pricing can be identified in the hospitality industry such as, competition based pricing, cost plus pricing, market oriented pricing, target pricing and value based pricing etc.

In the competition based method, the price may be determined relying on the similar products of competitors. Cost-plus pricing can be considered as the simplest method. The firm may estimate the production cost and pre determined percentage may add to determine the selling price. Setting up prices base on the results of market research on targeted market can be identified as market oriented pricing. In the method of target pricing, selling price may be calculated to create a specific return rate on investment in terms of pre determined specific production volume. In value based pricing, the price is relying on the perceived value for that.

Considering the domestic market, the pricing may directly associated with the revenue of the firm. Therefore, it is required to conduct market research to find the effect of different variables on price. If the pricing is too much high, there may be some issues can be occur in marketing the product. Similarly, if it is too much low, there may be a net loss for the firm.

Traditionally, the elements of proper price determination are market demand, competition and the cost. Those each element should be suit with the objective of the firm in relation to entering the international market. Probably the pricing at international market compare to the domestic market may differ accordingly.

Additional costs for the production can be considered as an important consideration in relation to international marketing. The additional costs may include, customer fees, value added taxes, cost fluctuations in production and other tariffs. Those can be final selling price determination factors which may have the potential to influence with the revenue.

Chapter 4
Using appraisal techniques to analyze and improve operational performance
4.1 Different performance measures and appraisal techniques

Performance appraisal can be considered as a methodology which the performance of a firm or an employee will be evaluated. In relation to the hospitality industry, quality of the product and the services cost of production and matter of time would be considered. The performance appraisal can be considered as a part of managing and leading carrier development.

According to Woods the hospitality industry may use at least one approach in the surveys such as graphic rating scale – 28%, narrative essay 37%, behaviourally anchored rating scales – 42% and management by the objective – 48% (Woods et al., 1998).

In relation to the hospitality industry, the other methodologies may be including performance standards and matching the employees’ performances with their jobs.

If the appraisal fails to meet the objectives and targets, it should use training and awareness program in relation to employees. Such system would be a future oriented one that reveals the potentials of employees.

4.2 Effectiveness of different quantitative and qualitative appraisal techniques

For an example, attitudes of employees, quality of the product and services and the quality of work of employees like factors can be considered under quantitative appraisal methods. Those factors can be assessed by using different questionnaires and interviews and also by the group meetings. The main drawback of qualitative approach is the findings may not be applied for wider populations with the same degree of certainty as in the quantitative analyses.

Quantitative factors such as volume of productive output, revenue increment and market share like factors can be assessed by using the primary or secondary data. In this method, results can be applied for the wider populations.

To improve the effectiveness of the appraisal technique mix of appraisal technique should be used.

4.3 Application of approaches

When applying the different approaches with different aspects in relation to the hotel industry, it would be critical to consider the approaches such as facilities and services to be offer, accommodation marketing and catering marketing and demand generating sources.

For an example, earlier times the Indian hotels have treated their customers by providing only the lodging facilities. But later the facilities were improved by adding value added services like safari.

Every hospitality firm should expect three major types of customers such as holiday users, business users and other users. Therefore, the products and services should be oriented to fulfil the needs of that all types of customers.

Focussing on the catering market is also important. There are three major categories that may generate profit for the industries are in-house guests, non-residents and the organized groups (Medlik and Ingram, 2001).

There are three major types of sources in hospitality industry in relation to the demand. Those are institutional, recreational and transit. Those groups may facilitate the generation of good impression about the firm in terms of building market demand.

Considering the planning process, three major types can be identified such as goal dependent planning, single use and standing plans. Goal dependent planning consists of objectives, budget and performance standard. Single use plans may include temporary goals to be achieved. Ongoing application can be called as standing plans.

The analysis and the implementing new approaches should base on those planning methodologies in combination.

4.4 Conclusion

Sustainable tourism can be identified as the attempt to generate employment for people while creating minimal impact on the culture and environment. The main aim is to treat the people, tourists and also the firms themselves with a positive experience.

Economists may forecast that the growth of international tourism would be range from 3% to 6% annually. Tourism is considered as the one of the largest and rapid growing industry in the world. Therefore, this would create a huge stress on bio diversity and indigenous cultures which may use in mass tourism.

Sustainable tourism may cut down the impact of tourism in many ways such as aware the tourists about the culture and natural habitats, conserving the natural resources, contributing to intercultural understandings and supporting local communities to purchase local goods.

Part B
Chapter 1
SWOT analysis for the High Valley Hotel
Strengths

Aesthetic value and the cultural diversity

Since the hotel industry surrounded by the nearby villages, the environment may be rich in cultural heritage together with the aesthetic beauty. Rain forests with natural lakes and streams may be incredible in relation to customer attraction such as hikers, mount climbers and other sports lovers.

The gap between the demand and supply

Since the hotel industry is currently possessing just sixty bed rooms, they may face problem in relation to demand and supply. It may lead to of create higher room rates together with higher occupancy level. Therefore, addition of another fifty bed rooms may lead to decrease the room rates and occupancy levels. This may have the capability of rapid expansion of the industry in the future.

Increment in the market share

UK’s market share in tourism would be expected to increase in the future in long term with the globalization. Therefore, with the new value added services foreign investers may head towards the hospitality industry.

Weaknesses

Lack of infra structure facilities

Since the hotel industry is surrounded by the villager may be slow development of infrastructure facilities when compare to the urban area. Therefore, the state government should take appropriate action to develop the infrastructure facilities.

Political influence

The changes in the political status of the state and the internal security may also affect both positively and negatively on the hospitality industry.

Opportunities

Benefits of the open sky concept

Open sky policy may lead to improvement of the travel together with the hospitality industry. Improved airline facility will increase the customer demand in relation to both domestic and international market.

Increased income levels

Rise of the income levels of the domestic customers would lead them to purchase value added services such as spa conference and banqueting centers.

Threats

Increased rival competition

Effect of the joining the major marketers in the hospitality industry may influence negatively on the business of the High Valley Hotel. It would also affect on the market share of the hotel group.

Changes in the arrival of tourists

Sole dependency on international customers would be a risk for the hotel industry. Because, during the conditions such as changes in the civil status of the country may directly affect on the industry. Therefore the equal importance should be given to both domestic and international customers.

Chapter 2
Advantages of the expansion plan

The expansion of lodging facilities would decrease the cost per bed room and also decrease the room rates. Those things are advantageous in relation to profitability of the industry. The expansion of value added services like conferencing and spa like facilities may lead to attract more domestic and international tourists. Not only that, incorporation of eco- tourism would also improve the customer attraction especially relation to mount climbers and sport lovers towards the hotel industry.

Expansion of the hotel industry will also improve the infrastructure facilities such telecommunication, developed transport systems. This would also beneficial for the village community surrounding.

Proposing the appropriate expansion plan may encourage the state government to incorporate with the hotel industry and offering approvals and other benefits for the industry. Those things may be important in relation to profitability of the hotel industry.

Bangladesh is home to numerous flora and fauna and possesses many panoramic beauties but most of them are unexplored. Having all the minimum requirements, the tourism industry could not develop adequately in the country due to the unwillingness of the governments. Currently, minimum infra-structural arrangement is developing, role of government is now positive, private and public organizations have step forward side by side to attract the local and foreign tourists, researchers, dignitaries and foreign delegates. The aim of the research is to identify the challenges and future prospects of the industry. This study will facilitate the decision makers to assess the intensity of the problem and to plan accurate measures for the development of tourism industry in Bangladesh which might contribute a big share in the GDP of Bangladesh.

The researcher has chosen this research topic out of his personal interest: Bangladesh is his homeland and is blended in his blood and flesh. Apathy of the previous governments led the researcher to explore the challenges and future possibilities of the tourism sector in Bangladesh. The researcher expects to emphasize the future development of tourism here in comparison with other regional and global tourist destinations.

Research Question

Located on the north-eastern side of the South Asian subcontinent, Bangladesh – a flat alluvial plain, criss-crossed by the world’s three mighty river systems, is bordered by India in the east, west and north; Myanmar in the south-east and by the bay of Bengal in the south. The land mass of 144,000 sq.km is home to nearly 140 million people. Covered with virgin forests, the slopes and valleys of the country are home to numerous flora and fauna. The world’s largest mangrove forest and the habitat of the Royal Bengal Tiger, the Sundarbans is located in the south. In the south-east, the country has a 120 km long, perhaps the world’s longest beach of soft silvery sand in a Riviera-like setting with crescent-shaped low hills overlooking the Bay of Bengal. Bangladesh is endowed with natural resources and the potential for a tourism industry. The main focus of this research aims to answer the question:

What problems does Bangladesh face and what might be the prospects as a tourist destination?

In order to analyse the terminology, ‘problems’ and ‘prospects,’ the researcher is not only required to explore both positive and negative aspects but also to highlight the past scenario along with the future assessment of tourism in Bangladesh. For answering the research question efficiently, the following aims are set.

Aims

To identify the challenge tourism industry currently facing.

To explore the future possible development.

To illustrate the role of the public and private sector in developing tourism in Bangladesh.

In order to successfully conduct the research, the above stated aims require precise objectives. That is why the researcher has applied the following objectives.

Objectives

To review academic literature relating to tourism development.

To examine secondary documents relating to the challenges and development of tourism in Bangladesh.

Suggest recommendation for the future development of tourism industry in Bangladesh based on the literature and stakeholders’ views.

The researcher has adopted a qualitative methodology for conducting this research most effectively. This research includes the view of the representatives from government bodies and private sector business-owners. Data from such organizations and freelance journalists and their opinions on tourism planning, problems and prospects are analysed in conducting the research paper which has helped the researcher to offer recommendations at the destination.

Tourism is not associated with aristocracy any more rather every person can afford now. With the passage of time, it has grown to such dimensions that it is considered as an important industry. The promotion of tourism as an industry serves multi-pronged interest which includes preserving cultural heritage, protecting arts and culture, interaction of different religion, exchange of views, and generation of foreign exchange and so on.

For last couple of years, Bangladesh has been highlighted as an attractive destination for tourists. Sundarbans and Cox’s Bazar have been included in the worldwide New7Wonders of Nature campaign among more than 440 candidate locations from 220 countries. “World leading publisher of travel guides and guidebooks, Lonely Planet, last year recommended Bangladesh as one of the top ten interesting travel destination in 2009” (Views On Tourism, 2008). Therefore, the aim of the researcher is to explore the challenges and opportunities relating to the development of tourism in Bangladesh. The areas of literature in this paper include tourism in the developing world, tourism in South Asia and sustainable tourism planning and development. A context chapter on tourism industry in Bangladesh is also included to provide more detailed information.

The researcher has tried to depict the scenario of current challenges and future opportunities of tourism industry in Bangladesh through his research paper but it does not reflect the entire picture of the emerging industry. Thus, future researchers can be conducted considering the research paper as a case study.

Literature Review
The Tourism Industry

“Tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited.” (UNWTO)

According to Mathieson and Wall, tourism is the temporary movement of people from their natural places of living or work to destinations, their activities, and the amenities and services to meet their needs. Each and every destination has impact on the area or the country. A Destination opens the door to demonstrate cultural heritage, exchange views, generate foreign exchange, develop the employment scenario, and strengthen the revenue reserve of the government and so on. Negative impacts include loss of cultural identity, environmental damage, and spread of infectious disease.

Figure 1: Butler’s Tourist Lifecycle (Source: Destination Recovery Services, 2007)

Butler, in his article proposed a widely-accepted model of the lifecycle of a tourist destination. The basic idea his model is that a destination begins as a relatively unknown and visitors initially come in small numbers restricted by lack of access, facilities, and local knowledge. As more people discover the destination, the word spreads about its attractions and the amenities which results into rapid development and expansion of business. Future of the destination fluctuates very much depending on the discovery, more improved amenities of another destination.

Demand of any destination is related to more and more investment because tourists wish to experience new and exceptional facilities and ambiences. Popularity of a destination depends on a number of factors and the tourism industry is very uncertain (McElroy & Albuquerque, 2002). Without frequent renovation, a destination cannot draw the attention of the tourists. Political unrests, financial turmoil, natural disasters, epidemic diseases, terrorist threats and lack of security can turn down the popularity of a destination.

Tourism in the Developing World and in South Asia

Tourists now find European and North American destinations less attractive and intend to travel to LDCs (Telfer and Sharpley, 2008). One of the reasons is rapid emergence of tourism in LDCs and another is financial advantages than the traditional destinations from the first world. Tourism operations by MNCs in LDCs create new opportunities and different kind of arrangement which the tourists always look for.

Most of the South Asian countries are booming in their tourism sectors. Among all the South Asian nations, India and the Maldives receive the most foreign currencies. Sri Lanka is not behind the race and the policy makers of the country declared 2010 as the year of tourism. They are promoting their twelve different components throughout the year. The Maldives is one of the sensual and honeymoon destinations of the world. Each and every state of India is also promoting their own state in every way possible.

The authority of Bangladesh at last realised the importance of tourism development to add extra revenue to the GDP of the country. Ministry of Civil Aviation and Tourism along with PPP has agreed to bring the tourism industry of the country forward. GoB has already declared to observe 2011 as the year of tourism and allocated Tk. 2.83 billion for the FY 2010-11 (Ministry of Finance), the highest ever allocation in tourism sector. Private sectors are more concerned in building infrastructures i.e. hotels, motels, resorts, amusement parks.

Sustainable Tourism

Four types of stakeholders including government authorities, the local business community, the local community and visitors remain involved in tourism at any destination (Bushell, 2001). For developing a successful tourist destination, the stakeholders are required to formulate an integrated plan. If all stakeholders do their part accordingly and remain responsible for their own actions, the sector of tourism will surely flourish.

“Sustainable tourism should make optimal use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural heritage and biodiversity.” (UNWTO)

For successful sustainability programme awareness, understanding and commitment to sustainability goals from management and staff are required (Speck, 2002). According to Butler’s (1980 cited in Weaver, 2006) Destination Life Cycle, unmonitored and unplanned tourism development resulting into ultimate weakness which may shake the foundation of tourism.

Proper facilities and accommodation is one of the first conditions for implementing sustainable tourism. It also requires assurance of booming of a destination and continuous investment to keep the pace of development. It also need be ensure the ecological balance, conservation and biodiversity. Sustainable tourism should not change or spoil the cultural resources, national and social values.

Context Chapter
Tourism in Bangladesh

Figure 2: Map of Bangladesh (Source: Lonely Planet, 2010)

Now-a-days, traditional tourist interest on some selected countries has changed. They now intend to explore new areas avoiding the over-crowded destinations. By identifying this changing behavior and trend in global tourist movement, many countries have developed their own tourism industry. Bangladesh is holding high potentiality for tourism. This sector might result multiplier effect on the country’s economy by not only earning foreign currencies but also creating new job opportunities for the huge unemployed population. Realising the fact, GoB has decide to observe 2011 as the year of tourism to acquaint the people with the country’s tourist resources.

Bangladesh

Geographical Coordinates

24 00 N, 90 00 E

Area

56977 sq. miles or 147570 sq. km.

Capital

Dhaka

Currency

Taka (TK)

Local Time

GMT + 6

Population

156,118,464 (July 2010 est.)

Weather

Tropical; mild winter (October to March); hot, humid summer (March to June); humid, warm rainy monsoon (June to October)

Visitor Arrivals (in 2005)

207,662Table 1: Bangladesh Statistics (Bangladesh Pocket Year Book, 2009; The World Factbook)

Tourism sector in Bangladesh is mainly supervised by public sector. Government regulates the tourism sector through Bangladesh Parjatan Corporation (BPC), the National Tourism Organization (NTO). With the twofold responsibility of development and promotion of tourism, BPC was established in the year 1972 and commenced business as a Corporation in January 1973. BPC, a semi-autonomous organization is responsible for providing tourism services to construct and run hotels, restaurants, operate duty free shops, transportation and car rental, establish and administer tourism training institution. NTO, on the other hand, is mainly a tourism service provider and promoter of tourism product. To foster the rapid growth of the tourism industry, GoB declared the National Tourism Policy in 1992.

Figure 3: Foreign Exchange Earnings from Tourism & Other Travels (1996-2005) [Source: Bangladesh Parjatan Corpotation]

The tourism industry of Bangladesh has received around Tk. 550 million between 1972 and 2006 while PPP has invested Tk. 1.8 billion on twenty tourism projects FY 2010-11. However, the GoB has realized the importance of tourism sector and shifted from their previous position since FY 2009-10. GoB has allocated Tk. 2.28 billion in the national budget of FY 2009-10 while allocation in 2010-11 amounts Tk. 2.83 billion (MoF, 2010) for the tourism sector. World class accommodation is one of the highest priorities to boost the tourism industry of any country. That is why, nearly 500 hotels, 40 resorts and 15 amusement parks (New Age, 2005) have been built at popular tourist destinations, including Dhaka, Cox’s Bazar, Chittagong, Sylhet, Bogra and Khulna during the last two years.

Bangladesh possesses the Sundarbans – the mangrove forest in the world, Cox’s Bazaar – the longest natural beach in the whole planet, the exotic tea gardens in Sylhet, the beautiful hills in Rangamati and Bandarban, the wonderful sights and sounds in the Chittagong Hill Tracts, the brilliant natural scenery in Foy’s Lake, the centuries old Buddhist monasteries and so on. Such places of interest in have managed to attract tourists to Bangladesh from each corner of the world which is reflected in the increasing number of tourist arrival in the country. A total of 165,887 tourists arrived from more than 76 countries in 1996 which increased to 207,662 in 2005 (Appendix 1). Moreover, foreign exchange earnings from tourism has increased from Tk. 33.59 million in 1996 to Tk. 69.91 million in 2005 (Appendix 2).

Methodology

A theoretical approach provides a “guiding framework for analyzing and interpreting the data” (Finn, 2000). It helps a researcher to remain consistent while collecting data and knowledge form them (Jennings, 2001). There are a number of theoretical approaches for research but only very few are appropriate (Veal, 2006).

Conducting the research, the researcher has mainly used secondary data and qualitative methodologies. Qualitative methodologies are associated with the interpretive approach of research (Veal, 2006). Jennings (2001) mentions researcher-participants subjective relationship as well as the participants considering the researcher as an “insider”. Unstructured research design, data displayed in textual form, highlighting key themes and a specific study setting are other qualitative features (Veal, 2006).

The advantage of using secondary data is the freedom from arbitration “by the interaction between the researcher and researched” (Jennings, 2001). Data from MoF, BPC, MoCAT, SB, and NTO mainly helped to have a clear idea about the condition of tourism in Bangladesh from government’s view. Future suggestions for sustainable tourism in Bangladesh by the authorities of Jamuna Resort, Padma Resort, Foy’s Lake Resort and Motel Atlantis have helped the researcher in conducting the research successfully.

The data collected from different sources has been analysed to assess the future growth of the economy of Bangladesh. One major problem in collecting data on tourism in Bangladesh is that there is no updated database in any authorities of the government nor the private sector has any recent statistics on the sector. Government bodies are rather non-cooperative rather than the private tourist operators.

Jamuna Resort, Padma Resort, Foy’s Lake Resort and Motel Atlantis authorities only provided their suggestion for creating a tourism friendly environment in the country. As most of the government bodies in Bangladesh have linked to internet in 2010 and most of the officials do not have email address, they could not be reached. Data from BPC and MoCAT have covered most of the data collected on the present scenario of tourism in Bangladesh.

Most of the tourist facilities are offered by the private sector but do not posses any data on tourism in Bangladesh as they are only concern about their business. However, suggestions provided by the private sector tourist operators have also been added in the research paper so that the policy makers can consider them while formulating future policies for sustainable tourism in Bangladesh.

Result and Analysis

For conducting the research successfully, primary and secondary data has been compiled and sectioned into several themes. The challenges and opportunities of tourism in Bangladesh have been identified through the analysis of data. It not only identifies the possibilities of tourism sector in Bangladesh but also forecasts the tourism potential of the country. The outcomes of the analysis are enlisted here:

Tourists visiting Bangladesh

Data from BPC and SB reveals the nationality and real purpose of the tourist visiting Bangladesh. Tastes of the tourists vary from person to person, even region to region; so, it is better to understand the tourist pattern of the country.

Types of Tourists

Analysing the data it is found that tourists visit Bangladesh mainly on three purposes. However, higher percentage of 42 visits on business purpose while 23 percent visit for pleasure. Representative of BPC stated that the percentage of tourist visiting for pleasure is increasing day by day as the tourism products of the country are improvising rapidly.

Figure 4: Purpose of the tourists for visiting (Source: BPC)

Nationality of Tourists
Arrivals
Africa

1730

America

18673

E/A & Pacific

35976

Europe

48961

M/East

2861

A/Asia

99459

Table 2: Foreign Visitor Arrivals by Region 2005 (Source: BPC)Data analysis of the year 2005 shows that 48 percent tourists visiting the country are from the Asian nations while visitors from Europe hold the second position with 24 percent. Percentage of tourist arrival from Asia Pacific, America, Africa and Middle East are 17, 9, 1 and 1 percent respectively. The number of tourists from SAARC countries total 99010 which means only 449 tourists from the rest of Asian nations have visited the country in 2005.

Tourism Products in Bangladesh

Tourists naturally compares the products a destination is offering with another one for ensuring the proper utilization of both money and time as well as peace of mind, relaxation, perfect ambience, improved accommodation and so on. Therefore, it is the duty of the policymakers of a destination to take necessary action for providing the tourism products to the tourists according to the demand.

Accommodation

World class accommodation is one of the highest priorities to boost the tourism industry of any country. In the previous years both the public and private sector have realised the need of accommodation of higher standard in the country. That is why, nearly 500 hotels, 40 resorts and 15 amusement parks (New Age, 2005) have been built at popular tourist destinations, including Dhaka, Cox’s Bazar, Chittagong, Sylhet, Bogra and Khulna during the last two years. Even the government run BPC has increased their area of coverage to 16 regions with 5 hotels, 17 motels and one cottage.

Tourism Product

Bangladesh with three World Heritage Sites – Mahasthangarh, Mosque City of Bagerhat and the Sundarbans, has a lot to offer to the tourists. World’s longest 120 km long sandy beach of Cox’s Bazar along with Patenga, Parki, Teknaf, St. Martin Island and Kuakata beach will definitely quench the thirst of beach lovers. The beauty of the largest mangrove forest in the world, the Sundarbans, can amaze anyone while travelling in steam boats and experiencing the diversity and ecosystem of the forest.

The lake district of Rangamati, the lake town of Kaptai, the hilltop town of Khagrachhari and the roof of Bangladesh: Bandarban will bring the tourists close to nature they may not have gone before. Archeological sites of Buddhists monasteries, Hindu temples and Muslim mosques and palaces can educate the tourist seeking archeological knowledge of South Asia and Bangladesh. Besides these, there are many places of interest in the country which might draw the attractions of the tourists.

Impacts of Tourism

National and global impacts of tourism influence the overall situation of a country concerning its economy, socio-economic condition, ecology and environment. Tourism enriches economy, exchanges social and cultural values, and conserves nature; however, it has some negative impacts as well.

Economic Impact

Tourists contribute to sales, profits, jobs, tax revenues, and income in an area or a country. Tourism activity normally focuses on changes in sales, income, and employment in a region. Thus, the economic benefits of tourism are well documented. In case of Bangladesh, contribution of tourism in the economy of the country is gradually increasing. The contribution of the sector is expected to get higher in the forthcoming years due to gigantic investment of public and private sector. The contribution of travel & tourism to GDP is expected to rise from 3.9% (Tk. 265.9 billion) in 2010 to 4.1% (Tk. 788.4 billion) by 2020 (WTTC, 2007). It is also anticipated to create an employment opportunity of 2,373,000 in 2010 which might increase to 3,114,000 by 2010. In the current year, an estimated amount of Tk. 64.0 billion is expected to be invested in travel & tourism sector.

It is not necessary that tourism has all positive impacts. Tourism is closely associated with uncontrolled, unsustainable and massed tourism growth. With a purpose of making money by selling experiences, tourism is mainly dominated by private enterprises. Market led planning can fail to achieve the objectives of sustainable tourism. Like all industries, impacts do occur, but the extent to which impacts are negative can be minimised.

Socio-Cultural Impact

An interface for cultural exchange, tourism facilitates the interaction between communities and visitors. As travels means to discover those things unknown or forgotten within ourselves, people want to interact with other cultures, learn about traditions and even confront themselves with new perspectives on life and society. Tourism can serve as a supportive force for peace, foster pride in cultural traditions and help avoid urban relocation by creating local jobs. The society can take the valuable aspects of another society vis-a-vis culture through tourism. The more one knows and learns about a destination, the more fulfilling the experience would be.

As tourism involves movement of people to different geographical locations, and establishment of social relations between people who would otherwise not meet, cultural clashes can take place as a result of differences in cultures, ethnicity, religion, values, lifestyles, languages, and levels of prosperity. The interest shown by tourists also contributes to the sense of self-worth of the artists and helps to conserve a cultural tradition, cultural erosion due to the commoditization of cultural goods.

Environmental Impact

Tourism has beneficial effects on the environment by contributing to environmental protection and conservation. It raises the awareness of environmental values and can serve as a tool to finance protection of natural areas. Most of the national parks are now conserved by the public administration due to the rising demand of tourism. The GoB has decided to conserve all the forests, places of natural beauties and build a marine park at Cox’s Bazar to draw the attraction of the tourists from the each corner of the world.

Development of tourism can gradually destroy the environmental resources on which it depends. Land and water witness the most negative impacts of tourism in the country. For the development of the sector, more and more lands are used to build infrastructure to create facilities for the tourists resulting to the shortage of land and water as well. Sewerage littering, deforestation, air and noise pollution are some of the many negative impacts of tourism on environment.

Conclusion

“Destinations interested in attracting foreign visitors and in developing sustainable tourist industries depend heavily on traveller perceptions of safety and peace”

(Sonmez, 2002: 176).

The aim of the research is to identify the challenges that the sector of tourism is facing currently and to asses the future as well. Tourism of Bangladesh has not flourished yet due to the unwillingness of the previous government. MoCAT has the highest allocation of Tk. 2.83 billion since the independence of the country in 1971. PPP is also working efficiently for fostering the growth of tourism with the financing from MNCs.

Bangladesh as a tourist destination has many things to offer: beaches, hillside, forests, waterfall, historical and archeological sites, amusement parks and many more. The country is now on the track to enrich the tourism sector like the other nations for a better contribution on the GDP. The lack of world-class accommodation near all places of interests is now under construction which may result into more tourist arrival in the country.

“If tourism is to be successful in the future, public and management must strive for all four goals: enhanced visitor satisfactions, improved economy and business success, sustainable resource use, and community and area integration.”

(Gunn with Var, 2002: 105)

All the forecast during the research indicate the rapid growth of tourism in Bangladesh. Now, the question is whether the growth will be sustainable or not. It is the responsibility of the government as well as the private sector to emerge the tourism for sustainability so that it can conserve the environment, socio-cultural structure and contribute revenue to the economy to make Bangladesh a middle-income country by 2021 (year of silver jubilee of independence).

Suggestions for the Future Development of Tourism

The four private tourism operator of Bangladesh have provided the following recommendations for the future development of tourism in the country.

Improved transport system

Infrastructural development of tourism industry

Uninterrupted power supply

Development of human resources in the sector of tourism

Preservation of places of natural beauty

Improved marketing strategy of the government

Proper planning of the government for ensuring sustainable tourism

References

Bangladesh Bureau of Statistics (2010) Statistical Pocket Book – 2009 [Online] Available: http://www.bbs.gov.bd/WebTestApplication/userfiles/Image/SubjectMatterDataIndex/pk_book_09.pdf [November 23, 2010]

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Appendices
Appendix 1
Email to Private Operators

Dear Sir/Madam,

I am conducting a research study as part of a Bachelor’s degree in International Tourism and Hospitality Management at EThames Graduate College in London, England. My research exa