Category: Free Essays

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

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

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

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

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

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

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

(Davis et al, 2008)

1.3 Objectives of the Research

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

1.4 Motivation

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

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

1.5 Research Focus

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

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

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

Job creation (Andriofis. K, 2008)

1.6 Research Questions

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

Revitalize Singapore Tourism.

Boost Singapore Economy.

Job creation

Chapter 2
Literature Review

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

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

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

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

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

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

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

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

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

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

Source: Singapore Tourism Board, 2010

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

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

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

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

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

Figure 2 Visitors arrival 2009/10/11

C:UsersDickeyDesktopSnag itVisitordec 07,dec08.png

Source: STB 2010

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

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

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

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

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

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

The STB to be SGD211, up by 12.2%.

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

C:UsersDickeyDesktopSingapore factshotel arr.png

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

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

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

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

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

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

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

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

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

Figure 6: Assessing the Economic Impacts

Integrated Resort: Assessing the Economic Impacts

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

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

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

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

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

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

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

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

Source: Trading Economics (2010)

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

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

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

Source: DBS treasures 2010

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

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

Job creation (Andriotis and Konstantinos, 2008)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Managing and Marketing Tourism

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

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

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

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

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

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

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

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

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

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

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

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

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

Reference list:

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

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

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

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

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

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

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

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

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

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

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

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

Environmental Impact of the Cruise Industry

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

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

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

Economic Impacts of the Cruise Industry

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

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

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

Economic Impact of the Cruise Industry on the United States

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

Table 1-1

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

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

Table 1: General Characteristics

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Population in 2006

24,039

74,295

47,629

162,704

2,503,281

2001 to 2006 population change (%)

8.1

12.9

18.6

23.2

0.9

Population density per square kilometer:

119.6

1,951.00

959.9

1,612.70

3,972.40

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

(19 Nov 2009).

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

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

Table 3: Occupied Private Dwelling Characteristics

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Total

7,945

25,090

15,655

51,000

979,440

single detached houses

75.1%

58.8%

60.8%

63.6%

27.3%

semi-detached houses

6.4%

7.6%

8%

4.1%

7.2%

row houses

2.5%

11.8%

16.7%

13.8%

5.6%

apartments, duplex

7.7%

5.5%

3.9%

3.3%

4.4%

apartments in buildings with fewer than 5 storeys

4.3%

10.7%

6.3%

2.3%

16.6%

apartments in buildings with 5 or more storeys

3.5%

5.4%

4.1%

12.7%

38.7%

other dwelling

0.4%

0.1%

0.1%

0.1%

0.2%

number of owned dwellings (%)

82.9

82.5

85.8

86

54.3

number of rented dwellings (%)

17.1

17.5

14.2

14

45.6

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

(19 Nov 2009).

Table 4: Income and Industry

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Median income in 2005 — all census families

82,836

88,514

98,482

80,121

59,671

Agriculture and other resource-based industries(%

4.2
1.38
1.2
1.05
0.8

Construction (%)

10.6

5.49

6.5

5.6

4.8

Manufacturing (%)

17.5

14.33

12

10.6

11.7

Wholesale trade (%)

6.3

6.04

7.2

6.7

4.7

Retail trade (%)

11.3

12.72

10.6

11.6

9.1

Finance and real estate (%)

4.7

6.63

8

12

10.1

Health care and social services (%)

7.7

8.86

7.8

7.65

8.9

Educational services (%)

6.8

7.45

8.2

6.6

6.7

Business services (%)

16.4
19.57
21.6
23
25.2

Other services (%)

14.4

17.53

16.9

14.9

17.1

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

(19 Nov 2009).

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

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

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

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

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

TABLE 2: Age Characteristics of the Population

Variable
Bradford
Newmarket
Aurora
Richmond Hill
Toronto

Median age of the population

36.7

37.2

37.2

37.8

38.4

Percentage of the population under 15 years of age

20.8

21.2

22.2

19.3

16.4

Percentage of the population aged 15 & over

79.2

78.8

77.8

80.7

83.6

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

(19 Nov 2009).

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

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

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

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

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

Description of Business
Services Provided

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

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

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

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

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

Business Ownership

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

Company location

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

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

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

Facilities and Staffing

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

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

Expansion Plan
2nd Year

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

3rd Year

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

5th Year

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

Marketing
Market Needs

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

SWOT Analysis
Strength
Weakness

Management team has expertise in starting a small business

Director has seen many successful pet boarding business overseas

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

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

Team leaders have no previous experience in pet industry

Lack of skilled workers

Opportunities
Threats

The pet industry is booming

There is increasing demand for boarding kennel

The satisfaction rate for the service offered by competitors is low

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

Competition

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

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

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

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

Differential advantage

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

Promotional Plan

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

Sign posts along the motorways G105.

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

Discounts offered during low seasons

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

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

Market Research

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

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

Customers and Pricing

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

Service Operations
Premises and Vehicles

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

IT

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

Insurance

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

Local Regulations

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

Management and organisation
Team Leaders

Lin Zhang

Financial Director

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

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

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

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

David Zhang

Managing Director

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

Several years of experience starting and running small businesses

Have excellent local knowledge and business networks in the area.

Team Members

Staff A

Receptionist

Customer Service: answering customers’ enquiries

Staff B and C

Dog Carer

Responsible for looking after dogs and supervising their plays

Staff D

Driver

Responsible for transporting dogs to and from Woof Hotel

Responsible for transporting dog foods and other necessities for Woof Hotel

Staff E

Gardener and Cleaner

Maintaining the landscape and garden of the Woof hotel

Clean dog kennels daily

Remuneration

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

Recruitment

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

Financial Reports
PROFIT AND LOSS ACCOUNT for Woof Hotel

Unit: ? (?1 = ?0.1 )

Year 1

Price per Dog per day

50

Average No. of Dogs

35

Gross Sales Daily

1750

Gross Sales Annually (365 Days)

638,750

Sales Tax (6%)

38325

Gross Profit

600,425

OVERHEADS

Wages

200,000

Rents

60,000

Utility Bills

70,000

Insurances

0

Dog food

150,000

Staff Vaccination and expenses

1,500

Telephone

2,400

Professional fees and recruitment

24,000

Transport

60,000

Advertising

200,000

Gardening and Cleaning

25,000

Sundries

50,000

TOTAL OVERHEADS

842,900

Net Profit(Loss) Before Tax

-242,475

Corporation Tax (20%)

0

Profit for the year

-242,475

PASTE CASH FLOW STATEMENT HERE

BALANCE SHEET

Unit: ? (?1 = ?0.1 )

Year 1

ASSETS

Fixed Assets

Property-kennels and exercise area

100,000

Property- office & staff accommodation

80,000

E&M

50,000

Equipment

50,000

Vehicle

120,000

TOTAL FIXED ASSETS

400,000

Current Assets

Cash

843,100

Debtors

0

TOTAL CURRENT ASSETS

843,100

TOTAL ASSETS

1,243,100

LIABILITIES

Loans

0

Current Liabilities

0

Tax Payable

0

Overdraft

0

Creditors

0

TOTAL LIABILITIES

0

CAPITAL ACCOUNT

Capital

1,485,575

Reserves (P&L from Yr 1)

-242,475

TOTAL CAPITAL

1,243,100

Analysis

Gross Profit Margin = Gross Profit / Revenue x100

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

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

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

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

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

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

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

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

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

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

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

Assumptions

The utility bill and rents are paid every month

There is no depreciation in the first two years

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

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

Commentary

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

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

Appendices
Currency

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

?1 = ?0.096 or ?1 = ?10.4

Proposed location of Woof Hotel on Google map

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

Dog ownership Statistics in Guangzhou City

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

Monthly Spending by Dog owners

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

Statistics of Holidays in China [5]

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

What the paper says

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

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

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

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

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

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

Communication skills

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

Face to face

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

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

Telephone e.g. call centre

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

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

Building rapport

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

Effective listening

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

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

Questioning

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

Developing a dialogue

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

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

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

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

Written Communication

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

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

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

Complaint Handling

Which skills could you show throughout each procedure?

Listening

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

Questioning

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

Empathising

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

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

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

Understanding the problem

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

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

Taking control of the situation

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

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

Agreeing solutions

Once the employee has deemed at least one suitable solution

Follow up

Presentation of yourself

Show how a member of staff should be presented

Presentation of the organisation

Below explain how the environment should be presented

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

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

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

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

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

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

Teamwork

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

Motivation

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

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

Team roles

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

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

Delegation of tasks

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

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

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

Lines of authority

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

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

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

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

The benefit of teamwork for colleagues:

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

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

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

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

The benefit of teamwork to customers:

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

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

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

The benefit of teamwork to organisations:

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

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

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

Business Skills

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

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

1: site A (Old Colliery ) it’s a disused site due to the wards acute and depravation, it requires considerable sterilisation of the premises and clean up the site before making any moves which will cost extra found to be invest out of the initial budget and also the site was used as a dump chemical site, transportation fluidity is extremely poor in this location when coming from Western District zone going toward the Eastern site of the district, and also the image of the site is likely to be seen as low restrict living environment and if considering the diminishment of green space in this locality where people are not willing to be staying in this low class environment where suitable housing accommodation are nowhere to be found. Now when highlighting the dump chemical on this site if taking an example of Fukushima in the recent year nuclear accident when focusing on the radio activity, we could easily underpin that radioactivity diminishes in time, so waste material is general insulated and be stored for a time period until they no longer constitutes a danger, but might also depends on the kind of waste. For wastes at low level of instance having low levels of radiation per mass unit might have being stored for within hours or days while the advanced level must be retained for a year or longer. However its environmental problems could be numerous. Now going back in the time when taking this scenario of us compare to Landfills issue we could come across two distinct major issues about the dump chemical waste concerning the environment and these are the atmospheric effects and hydrological effects. Where most often the household cleaning chemicals thrown by the surrounding people of site, along with the old industrial sites in this area get accumulate and mix over the time, the mixture of chemicals like bleach from the surrounding household of the site produce toxic gases that can significantly impact the quality of air. A more immediate concern is for the welfare of wildlife that comes in contact with these chemicals and it is not unusual to allow them to suffer being incredibly painful deaths from the chemical contamination. In conclusion we could tell that the environmental issues this District is not the appropriate place on where to build an NHS Hospital where physical treatment will be held, and over factor regarding the environment is that this site lacks of green space where the availability of green space is easy to be found on Dams Nature Reserve District. Aside from the various types of gases that can be created, formation of non-chemical contamination along with the dust may cause the atmosphere having impact in the air quality issue.

http://greenliving.lovetoknow.com/Environmental_Problems:_Landfills

2: Site B (Dams Nature Reserve) has much opportunities as it is described in the report compare to the others site due to the fact that it gives way to the nearest railway station, buses service are available to be used on the site and can lead you travel from the Middle district site toward the Western site of the district, where the people around the site are well intellectual and professional which mushes the requirements of NHS entry career’s portfolio which demands t to study for a recognised qualification for these professional staff member even though you can join NHS along with good GCSE and / or work experience in several of lower rank roles, as receptionist or porter from where you can build up qualifications and experience until you reach a senior role career, such as a laundry services supervisor. However the emplacement of Dams Nature Reserve meets the construction requirement, where the aim is to build a hospital in the Mid Southern District side which comes closer to this district along with the golf park viewed as an attractive activity could draw the attention of people in the site. All the more it’s a well prestige site compared to the others districts. It will attract more visitors on the site for those coming to pay for the health service if the NHS is built on this site or any other activities around the site that could attract investor, these could be the non-clinical support services such as catering, cleaning, laundry and pottering all of these could be run with less educating people from the other district that will come working at Dams Nature Reserve, where return revenue can boost the economical density in the area. History revealed that in the 1900s Great Britain also allowed workers from foreign places to come due to the fact that Britain was short of labour force and this encourage economic growth for the country which could also be the case for Dams Nature Reserve to call up for the less skilled population in the others District. Now with the existence of green space around the hospital shore will be viewed as a positive mind set for the environment, because spaces provide habitat for a wide range of birds, fish, animals, insects and other organisms, while avoid soil erosion and absorbing the rain water, thereby improving the drainage. It enables recreational use, somewhere to play meditating collect, or rest. Green provides a sense of social location it possible to obtain social recognition reinforce the feeling of the relationship and family solidarity, can teach and lead others, the opportunity to thinking about the personal values and social support and the link between residents and the natural environment that surrounds it. permit the city more bearable which is crucial for a community to be sustainable. In every walk of life, green space draws people on the outside and promotes social interaction. Provides spaces in which people can get together and possibilities for positive social interaction and environments. Studies have revealed that the residents in the vicinity of common green spaces “had more social activities and more visitors, community gardens are beneficial to the specific health issues affecting the low-income communities in urban areas. Exhibition in green space reduces stress and increases a sense of well-being and belonging, as the buses pollute the air, where the use of green space is shown to absorb pollution from cars driven miles away per day it has also been shown to reduce the urban heat island effect, directly by shading heat absorbent surfaces, and indirectly through cooling evapotranspiration. It also helps reduce noise, by shields dense in trees and bushesand may even clean up partially treated waste water. Finally, a green area is an indicator of overall ecological health of the ecosystem. It comes to a significant step in assessing the ecological viability in the community of Dams Nature Reserve, which is found to be the most prosperous parts of all districts.

Why Protect Urban Green Space?

3: when taking into account the profile of district C (Derelict Woolen Mill Complex ), we come to understand that this part of the district also have good attribute on which its well considerable place to leave on. it location gives access to motorway and buses ride from middle woollen town, but as we are recommended to build an hospital that will best serve demands for people, especially in the Mid Southern District, where enough space for car park would not really be possible to build in the zone, is the traffic issue were when considering transportation connexion from the hospital to be and the link between the districts for the good functioning of the traffic within the district itself and its boundaries in order to increase the traffic in this area but will cost up to a quarter of any budget as its mentioned on the district profile while we are trying to focus on the NHS Trust Hospital budget rather than having extra found to be raised in the contract . we could extremely say that its necessary to have much more roads to easily transfer people from one place to the others in case of emergency situation, while district B is more reliable and profitable for cars owners, public transport and others transportation facilities to move around compare to the rest of the districts . Now as every organisation or business fields we all aim to gain a positive return profit to satisfy our needs along with to meet the patients and visitors needs and requirement, however, there is not a competitive advantage opportunity of the economy in this area due to the fact that people are going jobless and also the others aspect that worries the team is the fact Derelict Woolen Mill Complex District is also seen as a depravation site.

Justification and suggestion:

When reading article about the three sites Old Colliery, Dams Nature Reserve and Derelict Woolen Mill Complex, we’ve understand that Old Colliery District in the past was use as a dumping site for chemical experiences where taking into account the radio activities in this area will not be suitable to establish an NHS Trust Hospital due to the fact of the air pollution and also the image of the site when it cannot attract investor to come establish themselves in this particular area of the district, moving on Derelict Woolen Mill Complex we deliberately see that the site has access to public transport with others good aspect but because its also hold the similar attribute of Old Colliery District when it comes to depravation and also because if having the NHS hospital in this locality it will be difficult for visitors to have access to car park. However, when analysing Dams Nature Reserve we came to conclude that it’s the suitable site on which we should invest on. our choice in that particular site comes when comparing the three districts and their overall overview Dams Nature Reserve met the requirement needed to build the NHS Hospital on due to the fact that it has access to public transport and having a green space in itself which is highly important as a place where having a business activities and hospital around, Dams Nature Reserve District also leads you travel from the Middle district toward the Western district, where the NHS Trust Hospital is proposed to be in this particular map of the District

SWOT & PEST Analyses

Strength: the strength of Dams Nature Reserve is that, its hold a green space environment as a park recreation for people to be coming and have a fresh moment of rest, while the district itself is the most prosperous site compare the rest of them, it has access to public transport and the reputation of the district comes with intellectual and professional people as with a good living environment compared to Derelict Woolen Mill Complex.

Weakness: thinking of the weakness of Dams Nature Reserve comes with the Specialist Scientific Interest and the absence of water and also the wildlife activist.

Opportunity: the opportunity of building the NHS Trust Hospital will again come to reinforce the economical aspect of the district itself and also permit the workforce from the others district to get themselves a job opportunity, while the Hospital itself will also meets the demand for the local and surrounding population.

Threats: in this scenario we could see the threats as the wildlife group and environmental opposition to come into an accord on how to cope with this issue in order to establish the NHS Hospital in the District.

Political

In the political aspect of this task we understand that Hilary Thompson ought to push forward the coming of this NHS Hospital in order to raise her profile due to the coming of the next election. It could have been important for her to use her statue as a member of the parliament to help solve the issue with the activist by having an accord with Dams Nature Reserve District in order to establish the NHS which will at first place reinforce the health service in her district and also promote job for her local community by having some percentage of workforce labour.

Economic

The economic factors is seen to be a professional place to live on where private hospital have already establish themselves and if focus on the return revenue, after solving the conflict between wild activist and others joint group will certainty comes to be a positive choice in regard of investment as it is also demonstrated by a bank representative concerning this site.

Social

Lifestyle factors such as wild activists and the opposed citizen that are not willing to let PFI financing the Hospital project.

Technological

Looking at the technological aspect the people living at Dams Nature Reserve are highly professional and can fluently work in the hospital including the technological aspect with in it

Environment:

Having the Hospital built in Dams Nature Reserve will come to be an ideal place due to the fact that it fits the ecological view of the people and the site never been used as dump chemical experience, along with its green space for the wellbeing of people around life style view is mentioned to be a professional place to live on

Legal:

The Tourism Industry is a flourishing all over the world. The scenario of the tourism industry is ever changing; it is always in a state of flux. Tourism Industry in India is experiencing a high period of growth and has improved over the years however there is still a lot of scope for improvement and expansion. It is fast becoming an important player in the global market. It is also proven that tourism is the industry that contributes most to the Indian GDP, employment and foreign exchange reserves. The tourism industry proves to be the back-bone of other allied sectors for example, hospitality, transport, handicrafts, etc. According to WTTC, in 2011, India has been ranked 1st in direct contribution to employment through travel and tourism and 2nd in total contribution with monetary value of 24974900 jobs and 39351900 respectively. Also in terms of GDP, India ranks 11th in direct contribution and 12th in total contribution [2] . The Indian Government has invested a substantial amount in infrastructure development to promote tourism for the country after sensing the importance in the GDP contribution. This effort has been successful to an extent in increasing the arrival of foreigners in the last decade. The “Incredible India” campaign was also a contributing factor to the increase in tourism. The campaign helped create a colorful and diverse image of India in the minds of travel enthusiasts all over the world. It has directly led to an increase in the interest among tourists and created interest generally around the world.

WTTC (World Travel and tourism Council) ranked India 4th in terms of travel and tourism investment with a total of $ 26.7 billion [3] . Also (in Asia), after China, India stands second. In 2006, 4 million international tourists visited India and spent US $ 8.9 bn [4] . In 2011 (Jan-June), the total Foreign Tourist Arrivals (FTAs) in India was 2.92 million and foreign exchange revenues stood at US$ 78.11 billion which is up 14.2% [5] . As a matter of fact, in spite of a negative growth rate of -2.2% in 2008-09 [6] , Foreign Tourist Arrivals increased considerably which registered a growth rate of 8.1% in 2009-10 [7] , despite the world recession, Indian tourism showed a positive growth. According to World Travel and Tourism Council, India will be a tourism hot spot between the years 2009 -2018 which will show maximum growth rate during this period.

“Nowhere in the world is found, such a beauty, different and diversified climate, flora, fauna, religions, languages, dialects, dressing patterns, life style and rituals, like India.” [8]

Domestic tourism is also very huge in the GDP contribution in the country. There is still a lot of scope in promoting the tourism in many parts of the country. Since tourism is seasonal, it is slightly difficult for the Tourism Department, Government of India. It is India’s middle class that has promoted the tourism in the country. The increase in disposal income among this class of people has contributed to rise in tourism within the country. Consequently, they spend most of their disposable income on travelling. In 2009, there were 669.02 million domestic tourists which comprised about 18.8% of the total tourists in the country. The Indians going abroad is also increasing at a growth rate of 12.28 % per annum.

Scope of Tourism

According to the past trends, India has seen to contribute 0.5% to the global tourism industry. There is still a lot of scope for businesses to tap the market. India has a very diverse geography, culture, food, monuments and a rich past. The ‘Incredible India’ campaign was promoted in order to attract various interests from tourists all over the globe in the varied types of tourism that has a scope for development and promotion. In recent times, Pilgrimage and Medical Tourism are one of the most popular among the foreign tourists. Medical tourism is currently growing at around 30% per annum. The other types of tourism are

Adventure Tourism

Leisure Tourism

Eco Tourism

Cultural Tourism

Wildlife Tourism

Highway Tourism

Heritage Tourism

Rail Tourism

Rural Tourism

An Indian Background chairman of the company, in 1956 established the first office in New Delhi, India. Company wanted to take the benefits of the religious beliefs attached with their company’s name “SITA” in India. It is still associated with high quality and brand. In 2000, Kuoni Travel Holding, a Switzerland based tourism firm acquired the 100 % stake of SITA World Travel India (Ltd.) and it became India’s largest travel company as Kuoni Travel India Ltd. Now, SITA World Travel is an Inbound Division of the Kuoni Travel India Ltd. And It is handling incoming international tourist to India from all over the world through a network of 30 offices in the region including associate offices in Sri Lanka and Nepal. SITA earned its reputation by giving world class services to its clients – travelers, tour operators and the corporate houses. Also it has specialized itself by providing personalized service and close working relationship with its customers around the world.

Factors which affect travel destination selection [9]

Things to do and see

Safety and security

Overall image of the holiday destination

Tourist facilities and infrastructure

Ease of obtaining Visa’s

SWOT Analysis
Strength:

Mass market product with small profit margin and economic of scale to create profit even though demographics and changing consumer trends

Training academy

Providing customized packaged tours

Personalized customer support

Online booking of packages

Offices in major cities of India

Weakness:

People expectation has changed but their packaged tour has not changed

Price of hotel is rising: no solution between cutting slim margin and rising price to customers

Limited only to main destination spots, needs to cover more ground

Proper feedback system not in place

Opportunity:

People go on holiday more than before

Travelers want exotic destinations or short city breaks

Increase in number of tourists because of upcoming sports event

Government lending support as part of “Incredible India” campaign

Increase in disposable income

Threats:

Heavy Price competition

People wait till last minute for bargaining

Rising hotel rates all over the world

General economic slowdown and terrorist attacks

Locally established travelling companies

PEST Analysis
Political

The strongest reason of tourists visiting India is its rich and vast cultural heritage which is under the control of Archaeological Survey of India. So any changes in policy have a very major impact on the tourism industry. Political instability in many states also hinders the tourism opportunities. E.g. – north east is still out of coverage of SITA travels because of this very reason. Although the government is now taking up various measures like stepping up vigilance in major tourist destinations in order to promote India as a safe tourist destination.

Economic

This industry thrives on the spending power of the people. The spending power is increasing in the country as well as all over the world. This increase in the spending power has left a good amount of idle cash in hand. This has led to a tourism boom and more and more people are now coming into the country with more cash and better affordability.

Social

Tourism is seen as something that will ultimately lead to the destruction of the social fabric. It is perceived that more the number of people travelling into a place, the more is the probability of the place to lose its identity. But apart from that people have now started perceiving tourism as a form of recreation. They are now more willing to go for packages like adventure tourism to Leh and Lakshadweep.

Technology

Although it is does not seem to be great factor but it plays a major role. Better technology has resulted in connecting many remote and unexplored areas. On the same terms online booking and transportation facilities provided by SITA travels have increased their number of clients.

PORTER’s Five Forces Model
Threat of New Entrants

As the search cost has been reduced due to the advent of internet it opens up the market for potential entrants, thereby increasing the possibility of a new company joining the market as the entry barrier has been reduced.

Rivalry among Existing Firm within the Industry

The major competitors of SITA Travels in India are Kesari Tours, Cox & Kings India Ltd

As the number of companies is increasing due to the advent of internet and the competition is increasing because of geographical expansion of markets and the reduction of entry barrier, thereby raising the rivalry and hence increasing the discount.

Power of Supplier

Entry barrier reduction and increased competition results in the increase of the power of supplier.

Power of Buyer

Reduction in switching costs has increased the bargaining power of the buyer.

Price has become an important criterion as people now can compare products and gain knowledge about them.

Threat of Substitutes

Competitors offer similar type of products and services.

Segmentation

Tourism (Inbound and Outbound tourism)

Segmentation types: Psychographic segmentation (Class), Behavioral segmentation (User status: First time, Regular, Potential). SITA is a large segment market addressing the customer needs of the international tourists.

Targeting

International Tourism: Initially tourists from USA are targeted, as SITA has stronger links with USA (Origin). Later they focused on other international markets like UK, Japan and Hong Kong. They have started a magazine called ‘INDRAMA’. This magazine portrays the rich tourist literature there by attracting foreign tourists to India). The idea of ‘Heritage village’ further helped them to become a better tourism facilities provider. Inbound and outbound tourists are the tourist types of International tourism.

Market growth of inbound and out bound tourists:

Outbound market: The primary target market segment is out bound tourism.

Overall Market: The total market size of the out bound tourism in 2010 is 12 million. It is expected to cross 20 million by 2015 and 50mn by 2020 (Source: UNWTO); more than 6.29 million tourists visited India in 2011. The total revenues of the out bound travel market is $14bn in 2010 [10] . The Indian outbound travel market has grown from 3.7 million in 1997 to 9.8 million international departures in 2007; the pace of growth has accelerated since 2004 at an average annual growth rate of over 16% [11]

Inbound market:

Overall Market share: The total market size of inbound tourism is 6.18 million

with a growth rate of 8.9%.The total revenues generated rounds off to US$ 16.691 billion.

Competitive Intensity: The major competitors of SITA Travels in India are Kesari Tours, Cox & Kings India Ltd which has more share than SITA while the others are Thomas Cook India Ltd, Karnataka State Tourism Development, Mercury Travels Ltd, Raj Travels & Tours Ltd, D Pauls Travel & Tours, Sachin Travels and Goa Tourism Development.

High budget Customers: The program ‘Affordable India’ targets the High budget segment tourists who come to Indian subcontinent. This program provides value added services to high budget travelers in order to customize destinations which were luxurious and affordable [12]

Positioning strategies

India’s first Leisure travel brand(Luxury segment) (Jan 2006)

Tourist Safety with SITA (Mumbai) ( 2006)

India’s Destination management service provider ( June 2006)

India’s tourist destination for Business travel (Kuoni Business travel) (Feb 2007)

Tourism education (Kuoni Academy) (May 2007)

Young achievers ‘Out learn , Outdoor’ school trips ( 2009-2010)

Perfect moments with Kuoni (2011-2012). This program covers 3 packages ‘The world is mine; Romantic escapes; undiscovered destination

Uniform service :Accommodation, updating tourism infrastructure, travel related equipment’s same in all the offices to maintain uniform service

‘Enpact’ ( 2011- 2012; Kuoni Academy: Pioneers to introduce a new teaching methodology

“Out of the ordinary tours for everyone” (2012) ( Targeting individuals and small groups)

Responsible tourism ( 2012) ( Thru CSR activities)

Indian travel brand which is focused on the luxury segment, Incentive, Trade Fair tours and Sports

Tourism Departments

In order to meet the tourists demand of visiting various places, SITA has tie up’s with local agencies. The services offered by the local agencies are meeting passengers on arrival/ departure, arranging local sightseeing and transport. SITA is maintaining a wide agency network to handle inbound and out bound tourism. The tourism department in SITA is divided in to two sectors as below:

Inbound tours:

This is the main foreign exchange earnings department of SITA. The marketing for this segment is done through various ways as below:

Brochure Tours: Marketing in the form of brochures ( Tour plans in brochure)

Tailor made tours: Customers design their tour

Special interest tours: Organized by companies and other agencies

Conferences and conventions: Arranging travel, registration facilities, accommodation arrangements, conference facilities, entertainment and leisure activities.

Out bound tours:

This is one of the fast growing tourism segment markets in India. Indians are the target customers in this segment. With an increase in the income level of the people, they are showing interest in visiting other countries. The tourist destination for the Indians is primarily USA and Europe [13]

Indian out bound travel market is 3.7 mn in 1997. Currently it is 13mn (2011-2012)

Estimated $28billion revenue in the year 2020.

Fastest growing out bound market in the world in terms of numbers (After china)

SITA Out bound tourism marketing

Major sources of marketing are through brochures and advertisements in the newspapers

Out bound division of SITA received TAAI travel award for 2011 [14] .

MARKETING MIX
PRODUCT (Services & Brand)

While planning the market offering, SITA’s marketers focused on five elements that constitute its customer’s value hierarchy:

Core Products

Destinations are the core products offered by any tour operator. Those offered by SITA are classified into:

Inbound Leisure: SITA’s major portion of foreign exchange is earned by this group. These destinations are designed to focus on leisure while travelling. Apart from must-do destinations these include tailored tours such as Cultural and Heritage Tours, Trekking and mountaineering Tours, Wildlife holidays, wellness and spa holidays, etc.

Individual Travel: SITA has maintained an unparalleled expertise in customizing travel packages for foreign tourists or working professional expecting a well-tailored itinerary which optimizes their time and ensures that all arrangements are in order.

Incentive Travel: Handled by: Distant Frontiers

Designed for large companies to motivate or stimulate their employees

Briefs are taken from each group, tailored to suit their needs and surpass their expectations by offering them special events planned exclusively for each travel group

Post-trip follow-up approach to stay in touch with the customer and ensure a re-visit

Main destinations include:

India

Nepal

Sri Lanka

Bhutan

M.I.C.E.: Meetings – Incentives – Conferences – Exhibitions

SITA is a member of:

The International Congress and Convention Association (ICCA) – a worldwide body that handles all types of International Meetings and Exhibitions

The India Convention Promotion Bureau (ICPB)

The Society of Incentive & Travel Executives (SITE)

Charters:

Leading player in India with the largest number of charters to Goa and Trivandrum

Handles leading charter operations from the UK, Germany, Russia, Poland, and various CIS countries.

Cruises:

Major players in Cochin, Chennai, Goa, and Mumbai

Shore Excursions- Regular sight-seeing trips

Overland Tours- Designed to explore the deep interiors of India

Adventures: Camel Safaris, cycling, trekking, scuba-diving, rafting, biking, mountaineering holidays designed especially for intrepid travelers

Basic Products

Transport

Ground transportation

Flight reservations

Train reservations

Accommodation

Culture & cuisines

Special arrangements- Like Women’s Group, Senior Citizens Tours, etc

Conferences and Events- In collaboration with MICE

Ground assistance

Meet & Greet services

Tour Guides

Tour Escorts

Expected Products

These are impeccable services for corporate clients like:

Seat availability on needed time

Accurate information

Quick check-in for the senior management

Information about various package and routes to a particular destination

Efficient customer support system

Augmented Products

These are the products that distinguish SITA from others. These may include special facilities like Wi-Fi availability throughout the journey, tele-checking, laptops on request, customized meals, etc.

Potential Products

SITA plans to come-up with underwater tourism very soon.

PLACE

SITA has its own branches situated throughout India hence are easily accessible. The customer can either go to the Tour office or plan a tour online. Hence strategic locations are very important for SITA.

North India: Agra, Delhi, Jaipur, Gurgaon, Varanasi, Udaipur

South India: Bangalore, Chennai, Cochin, Trivandrum, Hyderabad

West India: Mumbai, Goa

PROMOTION

The promotional strategies employed by SITA travels are:

Advertising

Publicity

Sales promotions

Personalized products such as Flight bags, wallets, Foreign Exchange and covers of passport, etc

Word-of-mouth Promotion

Credibility: The high magnitude of this is due to high credibility of SITA’s channel, especially in the eyes of the potential tourists.

Sensitivity: The qualities of services they promise are world-class and client-oriented

Approach: The marketers keep their eyes open ? identify the opinion leaders ? Special facilities for them to keep stimulating and creating demand

Personal Selling

Exhibitions- State and national tour packages, cruises, holiday financing, hotels, educational excursions, etc

E-Marketing

Twitter

LinkedIn- http://www.linkedin.com/company/155449

Facebook- http://www.facebook.com/SITAWorldTours

CSR Activities- Responsible Tourism

Spiti Initiative- To build a Solar Bath for a Buddhist nunnery in Spiti

Child Protection- Carries out workshops to protect children in rural and semi-urban parts of the country. Also offers training to children in various educational fields.

Literacy India Program- Has an independent paper recycling unit where women work to earn their living.

Bihar Flood Relief- Using its transportation system, it worked closely with Goonj to dispatch necessities to the flood affected areas in Bihar

Let’s Go Green- Implemented across all offices through posters and Green Utility trays.

Creative Alliance Network- promotes responsible tourism practices amongst the businesses that benefit from Rajasthan’s rich cultural environment.

PEOPLE

Employees

Well versed with the latest technologies in travel management

Well trained to handle difficult customers

Extensive training program’s- SITA Travel & Tourism Academy

Training on courses conducted by WATA, PATA

High credence quality via

Good work place design

Job Design

Other Customers

Caters to customers from diverse backgrounds by offering First class, Deluxe, or Luxury preferences

SITA Travels Online support

Unique Tours and value-added services

Personalized customer support

Bibliography

World Tourism Organization and the European Travel Commission. (2009). Retrieved from http://publications.unwto.org/sites/all/files/pdf/090616_indian_outbound_travel_excerpt.pdf

Indian Tourism Department. (2010). Retrieved from http://tourism.gov.in/writereaddata/CMSPagePicture/file/marketresearch/New/2010.pdf

Kuoni. (2011, December). Retrieved from http://www.kuoniindia.com/press-2011.asp

SITA World Tours. (2012, January 20). Retrieved from http://www.sitatours.com/press/sitaaffordablerelease%20012611.pdf

EconomyWatch. (2010, June 30). Economy Watch. Retrieved from http://www.economywatch.com/business-and-economy/tourism-industry.html

Mol, A. (n.d.). Preserve Articles. Retrieved from http://www.preservearticles.com/201103084425/essay-on-tourism-industry-in-india.html

Olivia Ruggles-Brise, E. A. (2012). World Travel & Tourism Council. Retrieved from http://www.wttc.org/site_media/uploads/downloads/nepal2012.pdf

Prof. Manjula Chaudhary, D. S. (2011, August). Indian Institute of Tourism & Travel Management. Retrieved from IITTM website: http://www.iittm.org/doc/IITTM_ITC_Report-2011-rev..pdf

Reshma S Kulkarni, S. S. (2011, November 26). The Hindu. Retrieved from http://www.thehindu.com/life-and-style/travel/article2659391.ece?homepage=true

An analysis of the hotel hospitality (service) standard – (A case study on Ritz Carlton)Synopsis

Based on the survey did by Singapore Tourism board, during the IMF period out of the close to 1000 delegates majority of the them were “impressed by level of service standards in Singapore. Survey results shows that Singapore has what it takes to develop a world-class service culture. Three in four were very satisfied with hotel service standards and venue facilities. Although there was a high percentage of votes that shows satisfactory service standards were provided but there is still one out of the four whom is either neutral or unsatisfied with the service provided.

Hence, reasons to investigate would include does Singapore have what it takes in terms of the hospitality sector, able to develop a world class service culture? As a tourism hub, how would service standards impact the country/industry? Are the current service provided, meeting the standard requirements?

Introduction

Tourism being a key industry in Singapore attracts millions of tourists and generates billions of income for the economy each year. In 2006, the number of tourists visiting Singapore reached a record number of 9.7 million as compared to 8.9 million in 2005, with an increase of 9 million in a year, beating expectations. Closely affected by the number of tourist visiting, the hotel industry also has experienced an outstanding year. With hotel occupancy and room rates at an all-time high, this shows positive outlook for Singapore and the industry. Key players of the industry include The Ritz-Carlton Hotel Company, L.L.C, Four Seasons Hotels Inc, Starwood Hotels & Resorts Worldwide, Fairmont Hotels & Resorts Inc, Hilton Hotels Corporation.

The hotel industry can be segmented in the form of diamond rating of one to five by the American Automobile Associations (AAA) lodging classification. Ratings are given based on mainly the facilities and services provided by the hotels. One important factor of the five diamond rating is that the guest is made to feel like a very important person at all times by every employee of the organization. One fine example would be the Ritz-Carlton Hotel where genuine care and comfort of their guest is their greatest mission.

Lodgings with a one-diamond rating provide good but modest accommodations. Establishments are functional, emphasizing clean and comfortable rooms. They must meet the basic needs of privacy and cleanliness. Rates are generally economical.

The two-diamond lodging maintains the attributes offered at the one diamond level, while showing noticeable enhancements in decor and/or quality of furnishings. They may be recently constructed or older properties, both targeting the needs of a budget-oriented traveler.

Establishments rated three-diamond offer a degree of sophistication. Additional amenities, services and facilities may be offered. There is a marked upgrade in services and comfort.

Excellent properties displaying a high level of service and hospitality are given a four-diamond rating. These properties offer a wide variety of amenities and upscale facilities — inside the room, on the grounds and in the public areas.

Lodgings awarded five-diamond ratings are renowned. They exhibit an exceptionally high degree of service; striking, luxurious facilities; and many extra amenities. Guest services are executed and presented in a flawless manner. The guest will be pampered by a very professional, attentive staff. The facilities and operation help set the standards in hospitality and service.

(http://www.caasco.com/travel/destinations/diamond_criteria.jsp)

Tourism in Singapore

Being flexible to the changes in the wider socio-economic environment shapes tourism in Singapore. Tourism policies and strategies have thus largely corresponded to global forces such as influencing trend in tourism and economic development as well as reacting to local factors such as changing social conditions in the country. With the increase in travellers for Business Travel, Meetings, Incentives, Conventions and Exhibitions (BTMICE), Singapore Tourism Board (STB) plans to focus its efforts on further developing this and including two other key customer segments; leisure and services.

Tourism drive in the next few years would include the FORMULA ONE SingTel Singapore Grand Prix, the first night race in the history of F1 racing. Two Integrated Resorts, Marina Bay Sands and Resorts World at Sentosa, coming up in 2009 and 2010 following, Singapore can look forward to even more regional and world interest in the future. In addition, the Singapore Flyer, Singapore’s iconic 165-metre observation wheel similar to the London Eye, is due to take tourism to greater heights at the start of 2008. Not forgetting its venture as a shopper’s paradise, there will also be three new shopping malls adding on to its exciting range of tourism products.

Impact of tourism on Hotel industry

Local hotel industry will have to be well-prepared for the visitors that will be travelling into Singapore. As Singapore focus on the Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions (BTMICE) audience, it is important that our hotels meet the requirements of the international standards to cater well to our guest expectations.

In order to meet to the needs of these guests, service and facilities provided must be of a certain criteria. Standard facilities and services would include a 24hr business centre equipped with the latest device, International Direct Dial (IDD) phones, and internet, fitness centre furnished with the latest equipment, restaurants that provide food and beverage (F&B) services, guest service should also be available.

Singapore hospitality industry

Hospitality industry in Singapore has always been doing well, achieving an increase each year. From total number of 184 hotels in 1996 to 226 in 2009. Being a service sector, ensuring customers satisfaction would be their up-most objective. Catering to guest request within the shortest possible time, being pro-active, friendly and approachable towards guest would all make up to the delivery of good service.

Singapore’s best resource would be our labour force. All service sector’s success all ties down to its staff, same goes to the hotel industry. It is the work of all these contributions by commendable hotel workers which makes the visit memorable. Positive forecast and rising confidence in the hotel industry is an essential but not a condition adequate for the industry to pursue its growth to the next level. The hotel industry eventually depends on its people to accomplish this quantum leap.

Service workers play a vital role in building and burnishing Singapore’s reputation for being efficient yet hospitable. An exemplary hotel worker is one who is knowledgeable and display warmth and friendliness, takes good care of guests and gladness in pleasing them. Most importantly, one who is always learning how to do his job better.

A good hotel not only provides premium material comforts, it must also be capable of delivering these services through warm, friendly and attentive staffs to each and every hotel guest. In fact, something that leaves the deepest impression on the guest is quality of the service, or lack of it. Positively applying all these contributions fully in serving, guests bring away these memories that will make them want to come back again. Singapore values and needs more of such work force. They will become the role models, setting the standards to be followed by the peers. They create the benchmark for Singapore’s hotel industry on service delivery.

“In order to successfully transform Singapore into a global service capital, every one needs to play his part. I am confident that if we all take the extra step and be a GEM, and deliver our service from the heart, we will make a difference sooner rather than later, and create in the process a service culture in Singapore that others will talk about.”

By Mr Raymond Lim, Minister in the Prime Ministers Office and Second Minister for Finance and Foreign Affairs in the Excellent Service Award (EXSA) 2005.

(http://www.spring.gov.sg/newsarchive/epublications/et/2006_01/index6.html)

Singapore – PEST analysis

Politically, Singapore Workforce Development Agency (WDA) has implemented the Go the Extra Mile for Service (GEMS) movement aiming to encourage better service. STB has set a target to achieve tourist arrival to 17million by 2015. Hotel performance reflects tourist arrivals, hence in order to achieve what STB’s goal service plays an important factor in improving hotel performance. Another plan by STB is to focus efforts on further developing customer segments (e.g. leisure and services).

Economically, customers have increase in spending power; people are more willing to pay for better service, locally and especially international guests. Locally, more jobs are being created due to the strong and stable economy growth in 2007.

Socially, consumers lifestyle are also improving, therefore when it comes to service it does not satisfy them with just the basics, they would expect value added services. With a fast moving pace, efficiency is another important requirement in service delivery. As a tourism hub welcoming a huge number of worldwide visitors, international service standards of the hospitality sector would be expected.

Technologically, Singapore has an advance technology infrastructure (Wireless Internet, well-coverage telecom services, 3G technology available) seamlessly connecting the people not only within the island but also world-wide. With these tools available it further supports efficiency of work.

The Ritz-Carlton Hotel Company, L.L.C. (Case study)

The history of The Ritz-Carlton Hotel Company, L.L.C. originates with The Ritz-Carlton, Boston in 1927. The standards of service, dining and facilities of this Boston landmark serve as a benchmark for all Ritz-Carlton hotels and resorts worldwide. Ritz-Carlton is a brand of luxury hotel and resort with 70 properties that are located in major cities and exclusive resort destinations of 23 countries worldwide. The Ritz-Carlton brand is managed by the Ritz-Carlton Hotel Company LLC, a subsidiary of Marriott International.

Service and Total Quality Management

Huge pressure on service industries to deliver superior service has been exerting on the increasingly open and intensely competitive market. Many hospitality companies have leap on the service quality bandwagon with the force of rising guest expectations and competitive necessity, which definitely includes the Ritz-Carlton Hotel.

In areas of service, Total Quality Management (TQM) is a participatory process that empowers all levels of employees to work in groups to establish guest service expectations and determine the best way to meet or exceed these expectations. TQM in Ritz-Carlton is referred to as A Way of Life which is a process of Mistakes, Rework, Breakdowns, Inefficiencies and Variation (M.R.B.I.V). The term guest is preferred over the term customer reason being when being able to treat customers like guest the easier it is to exceed their expectations. One successful hotelier has insisted for a long time that all employees treat guests as they would be like to be treated themselves.

TQM being a continuous process works best when good leaders exist in the organization. They create a stimulating working environment in which guests and employees (sometimes called internal guest: one employee serves another employee who in turn serves a guest) becomes an integral part of the mission by participating in goal and objective setting. Leadership is put into practice in several ways. At the Ritz-Carlton, senior leaders personally work with employees to ensure the exhibition of Ritz-Carlton standards. On a daily basis, at the beginning of each shift, these standards are enforced during the daily line-up meetings, where employees are briefed on special concerns for that day. Through employee satisfaction surveys any gaps in the effectiveness of hotel or company leadership are identified. Any problems are dealt with through training.

Excitingly, by installing TQM everyone of the Ritz-Carlton Hotel becomes involved, creative ways of employees are encouraged to solve guest-related problems and improve service. Other benefits include cost reductions and increased guest and employee satisfaction, leading ultimately to increased profits. When employee satisfaction is high it boosts their morale and in turn they provide better services. Leadership is the vital component in promoting focused commitment as the foundation of a quality service initiative. TQM is a top-down, bottom-up process that can only be achieved with active commitment and participation of every employee ranging from the top executives down to the bottom of the corporate ladder.

TQM focuses on error prevention and quality control (QC) focuses on error detection. Quality control is generally based on industrial systems hence it tends to be product-oriented rather than service-oriented.

To empower employees, managers must be able to:

Take risks.
Delegate.
Foster a learning environment.
Share information and encourage self-expression.
Involve employees in defining their own vision.
Be thorough and patient with employees.
Recognition

The Malcolm Baldrige National Quality Award is the highest level of national recognition for quality that a U.S. company can receive. The award promotes an understanding of quality excellence, greater awareness of quality as a critical competitive element, and the sharing of quality information and strategies.

Seven categories make up the award criteria: Leadership, Strategic Planning, Customer and Market Focus, Measurement Analysis and Knowledge Management, Human Resources Focus, Process Management and Business Results. At Ritz-Carlton, a focus on these criteria has resulted in higher employee and customer satisfaction, increased productivity and market share. Perhaps most significant is increased profitability.

The company won the Malcolm Baldrige National Quality Award in 1992 and 1999. The Ritz-Carlton Hotel Company was the first hotel company awarded the highly prestigious prize, given annually by the U.S. Department of Commerce. With 24-hour room service, twice-a-day maid service, complete gymnasium facilities, and menus that continued the tradition of culinary excellence well prepared for competing with Four Seasons and other hotel groups in the luxury hotel market. Ritz-Carlton Hotel is the first to win and only two time winner of the hotel industry.

The Ritz-Carlton Hotel Company was founded on principles of innovative levels of customer service. The essence of this philosophy was refined into a set of core values collectively called the Gold Standards. The credo is printed on a small laminated card that all employees must memorize or carry on their person at all times when on duty. The card lists the three steps of service.

Strengths of Ritz Carlton would be first of all their staffs. With strong beliefs in Organizational leadership capabilities, company leaders are responsible for developing factors that are vital to the success of the company. The Ritz-Carlton Gold Standards Software (e.g. Real-time Database System) available, information can be updated simultaneously throughout operations as a result improves service delivery in terms of efficiency and accuracy of information. With the support of their database system, individualize service could be provided by employees remembering and recognizing guest by name and takes note of the preference of guest when they visit. One example is the review from Asiarooms.com, “Ritz Carlton Millenia is the only hotel in Singapore whose staff greets you with smile and your name, even at 3 a.m.”

Committed employees rank as the most essential element. All employees carry a pocket-sized card stating the company’s Gold Standards, which include a credo, motto, and the 20 basics. Each employee is expected to understand and adhere to these standards, which describe processes for solving problems that guest may have. All employees are to go through training before working at Ritz-Carlton. Ritz-Carlton Hotel is a place where empowerment of employees reinforces decentralized decision making closest to customer. Empowerment is not an organization concept rather than an operational philosophy. All staffs are given empowerment to break away from their job to attend to guests. Each employee is empowered up to $2,000.00 per day/per guest. With allocation of empowerment by leaders to employees, trust is being built upon.

Service like multi-channel touch points are provided for guests. This includes online, front desk, guest and phone services to allow transaction and information to be passed through. To improve service delivery, software is available to allow latest update of guest or company information, on example would be real-time database system. They also provide individualized service, by implementing a Guest Recognition Program. With this guest recognition program, guests are recognized and address by names when greeted, personal preference are also recorded and entered into the database system. All employees in Ritz-Carlton are to personally escort guest to their enquired location rather than directed.

The first to win and only two-time winner of the Malcolm Baldrige Award in the service category (1992 and 1999) truly shows that they possess a strong business model. Basically, the methods used by Ritz-Carlton Hotel to achieve their vision are based on application of the principles of TQM, the Malcolm Baldrige national quality award criteria and the “Green Book”—an employee handbook.

Ritz-Carlton weakness would include the physical landscape of their hotel. There have been review of guest complains that furniture are worn out. Positioned as a High end hotel, naturally it will only be catered to guest who can afford the stay there. Underperforming employees would also post as a huge weakness for Ritz-Carlton. There are complains from customers saying that employees in reception are giggling away, ignoring guest.

Opportunities are increasing as STB targets to attract visitors of 17million by 2015. With the increase in number of tourist arriving, Ritz-Carlton can target on the larger number of customers. With STB’s support for further development of the BTMICE sector, they can make use of the chance to look for areas to review and further improve guest service due to the higher expectations for service delivery.

Threats identified would be competitors following Ritz-Carlton’s business strategies. With the pressure on service excellence and looking at Ritz-Carlton’s success there is a high possibility of competitors following their business strategies. Being on the top for as a service provider, it will be a test to how they can still further improve and be above competitors. The upcoming of Integrated Resorts will also mean that business might be taken away as there a more choices available for the visitors. With Singapore facing the problem of lack of manpower in the service line, it will post as a difficulty for Ritz-Carlton to find a suitable labour force for their service delivery.

Recommendations

Recommendations to Ritz-Carlton would include with regards to their hotel’s physical landscape, they can considered renovating the hotel’s interior. Indentifying all problematic facilities available in the hotel and replace those within the shortest possible time so that it does not affect the guest experience. For the problem to underperforming employees, Ritz-Carlton could highly encourage and look into guest feedback, especially for post-service feedbacks. It is actually very important to push for post-service feedback as usually when customers are unhappy about the service provided, few will bother to complain and will just switch to other available similar service provider as they have the power to do so. If Ritz-Carlton is capable of getting feedback from the unhappy customers they will be able to fully resolve the problem of underperforming employees.

In order for Singapore in terms of the hospitality sector, to develop a world class service culture, philosophy and accomplishment of Ritz-Carlton could be adapted. To educate Singapore citizens of the roles they play in presenting Singapore to the world. As a tourism hub, by having excellence service these standards will be able to help Singapore open up to numerous opportunities for the world class service industry.

Conclusion

Regardless the role of the employee in the company be it member of the frontline staff or a backroom team, all employees contribute significantly to a hotel delivery of service. Services are experiential: they are felt, lived through, and sensed. The moment of truth is the actual guest contact.