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The objectives in this section will reveal on what does the purposes of this research project served. Firstly, this project will briefly discuss about PESTE (Political, Economic, Sociocultural, Technology, and Ecological) analysis on Malaysia. The discussion will go on into the literature part whereby it will firstly discuss various type of definitions of tourism. Then it will discuss about the tourism planning five approaches which will be Boosterism, Economic, Physical/Spatial, Community and Sustainable that has been utilized by Malaysia government.

1.2.1 Politic

Malaya, which is now known as the peninsular Malaysia, became independent on August 31, 1957. In year 1963, Malaya merged with Singapore, Sabah and Sarawak to formed Malaysia. But after two years, Singapore has become an independent country on 9 August 1965. Now, Malaysia consists of 13 states whereby 11 of its are on Malay Peninsula and the other two, Sabah and Sarawak are on the island of Borneo. It has three federal territories which is Kuala Lumpur, Labuan island, and Putrajaya federal administrative territory. Each state has an assembly and government which are headed by a chief minister. Among 13 of these states, 9 of the states have hereditary rulers which are usually titled as “sultans” while the rest of the four states have appointed governors in counterpart positions.

Although Malaysia is known for its strict rules but tourist who are visiting Malaysia not more than one month does not require visa from the Malaysian Immigration Department. It is also important that foreigners follow the conditions and laws of Malaysia.

1.2.2 Economy

After 1957 where Malaysia became independent, the economy of the country was mainly based on rubber and tin. Since then, economy was growing and become a more industrialized market. In the 1997-1998 East Asian crises, Malaysia was one of the countries that involved in the Asian crisis but did not involve the International Monetary Fund (Sundaram, 2006). But it recovered from the recession very fast and since then, the economic was very stable with a GDP rate of RM679,687 million in year 2009 (Department of Statistics Malaysia, 2010). The government has spend an amount of RM 40.1 billion in subsidizing petrol, natural gas, food and road tolls in year 2007. Malaysia also does have a lower percentage in unemployment rate which is 3.3% recorded in July 2010 and 3.1% in August 2010 (Department of Statistics Malaysia, 2010).

1.2.3 Socio-cultural

According to the Official Website of Department of Statistics Malaysia which was updated on 02 July 2010, it is stated that Malaysia currently has 28.25 millions people. It is well known that Malaysia is a multicultural country which consists of a mixture different ethnic which are Chinese, Indian, Malay, and also indigenous and others. Malays makes up almost half of the Malaysia and then follows by Chinese and Indian. Most of the Malays are Islam while others may belong to Buddhism, Christianity, Hinduism or other/none. Malaysia was recorded an annual rate of growth of 2.0%.

The official language used in Malaysia was Bahasa Melayu, then followed by other language such as Chinese which comes with various dialects, English, Tamil and others. This makes Malaysia a perfect country for tourist to visit because there will be no language barriers for them as long as they can speak either one of them.

1.2.4 Technology

Malaysia has a very good national and international telephone lines. It is because Peninsular Malaysia are using microwave radio relay and it provide a good connectivity between cities. It also have two international earth stations and also two Intelsat which are located at Indian Ocean and Pacific Ocean. Thus, tourists who are travelling to Malaysia will have no connectivity problem. By now, Malaysia has a total of nine Internet Service Provider (ISP).

Some of them are P1 WIMAX, Maxis Broadband, Streamyx, Jaring, Celcom Broadband and so on. On the other hand, Malaysia also have a good range of radio and television stations. It has 19 radio stations that are owned by private sector while 34 stations are owned by government. Furthermore, Malaysia has 58 airports. 36 of them are on East Malaysia while the rest, 22 are on Peninsular Malaysia. Hence, these technologies that available in this country will definitely make life easier for tourists.

1.2.5 Ecological

Malaysia is full of biodiverse range of flora and fauna which can be found around the country. It is because the tropical rainforests comprises to almost 70% of Malaysia total land area. Malaysia has been recorded that it has the world’s fifth largest of mangrove forest whereby the world largest mangrove forest area is in Sundarban, Bangladesh. Ever since Malaysia has been filled with a lot of natural resources and environment, the government has also take part in preserving the environment to prevent further damage being caused to it.

The government has put a lot of effort in preserving this environment by firstly introducing the Air Pollutant Index (API). The API is an indicator of air quality and was developed based on scientific assessment to indicate in an easily understood manner (Department of Environment, 2007). Besides, the Department of Environment (DOE) also conducted the National Ambient Noise Monitoring Programme to determine the Malaysian ambience status in year 2006 (Department of Environment, 2007). For the river water quality control, the DOE has started to monitoring the river since 1978 (Department of Environment, 2007).

2. Literature Review

2.1.1 Definitions of tourism

There is no single definition of tourism to which everyone adheres. Many definitions have been used over the years, some of which are universal and can be applied to any situation, while others fulfill a specific purpose (Weaver and Lawton, 2010).

But a more recent definition from WTO (1991 cited in Mason, 2003, p. 5) defined tourism as the activities of a person traveling outside his or her usual environment for less than a specified period of time whose main purpose of travel is other than for exercise of an activity remunerated from the place visited.

However, none of these two definitions makes any connection to the impacts of tourism whereby impacts are the key to any discussion of the planning and management of tourism (Mason 2003, p. 5). But Jafari (1981, p. 3 cited in Mason, 2003, p.5) stated that tourism is a study of man (sic) away from his usual habitat, of the industry which responds to his needs and the impacts that both he and the industry have for the socio-cultural, economic and physical environments.

2.2 Tourism Planning Approaches

2.2.1 Boosterism

Boosterism has long existed ever since tourism started. Boosterism can also be defined as the act of boosting a travel destination or a city which are done usually by the people in the area affected. Hall (2000) comment that boosterism has long been the dominant tradition towards tourism since mass tourism began. Hence, sorts of effective method are being exploited in order to boost a place. A place which is full of resources such as cultural and natural can be taken as an example. Malaysia is a good set of example for cultural and nature tourism with its existing rich resources.

Although boosterism has been active for a long period but it was only discovered by people when big event such as Commonwealth games and Formula 1a„? racing event are being held in different countries (Hall, 2000). The changes in tourist arrival and room supply by hotel can be noticed easily when these huge event are being held.

It can be seen that Malaysia has been trying hard to promote the country by using different type of promotion to attract different type of tourist. For example, there is one event called Malaysia Year End Sale (YES) that is ongoing from 20 November 2010 to 2 January 2011 (Tourism Malaysia, 2010). The event purpose is to attract shopping tourist to Malaysia because at that time, all shop around Malaysia will be having alot of discount which can never be seen during other period.

Another side of boosterism by Malaysia is advertising. The Minister of Tourism Malaysia has launched an advertising campaign called ZOOM! Malaysia for SMRT trains, busses, and taxis in Singapore (Tourism Malaysia, 2008). This advertising campaign specifically targets the public transport because it was popular among the locals and foreign tourists (Tourism Malaysia, 2008).

From another side we can also see that Malaysia has successfully in promoting Malaysia in September 2006 whereby Tourism Malaysia has signed a ?2 million deal with Manchester United to promote Visit Malaysia Year 2007. This has also directly make Tourism Malaysia as one of the official sponsors of Manchester United Football Club (MANUTD, 2010).

2.2.2 Economic

When tourism emerged as a part of economic sector in the decades following World War II, most researchers and government administrators assumed its growth to be a positive and desirable process (Lawton, 2010). Ever since then, many countries have used this as an opportunity to promote their country to other world as a tourist attraction. Countries with natural resources such as cultural and heritage area, historical place that are left behind after the impact of war will be a great benefit to the particular country in promoting tourism. Actually what can tourism contributes to a country’s economic status? The contribution can usually be measured at either a national level or at the local or regional scale. The impacts of tourism to economy are as follow:

foreign exchange earnings;

government revenues;

generation of employment;

regional development.

One of the main characteristics of the economic approach is the use of marketing and promotion to attract the type of visitor who will provide the greatest economic benefit to the destination given the destination’s specific tourist resources (Hall, 2000). For example, the Malaysia Year End Sale promotion that will be launching soon. Although the promotion will be all around Malaysia but it will be more focus on Kuala Lumpur, the capital city of Malaysia because tourist will normally more focus in capital city. With the plenty of resources available in capital city such as high-end shopping malls, the promotion can be executed flawlessly with its aim achieved.

2.2.3 Physical/Spatial

In the last decade of the twentieth century, it was noted that tourism depends ultimately upon the environment, as it is a major tourism attraction itself, or is the context in which tourism activity takes place (Holden, 2000). However, Lawton and Weaver (2010) argued that problems can occur if a destination becomes too dependent on tourism, or if the sector is controlled (or is perceived to be controlled) by outside interests. It is indeed a fact that tourism can cause both invisible and visible impacts to the environment. Therefore in order to minimise the impact that tourism can caused to the environment, Hall (2000) suggests that visitor managers should seek to manipulate travel patterns by concentrating or dispersing tourists in sensitive areas. For example, many national park limits a certain number of visitors per day to ensure minimal impact that can be caused to the area.

Malaysia is indeed a most fortunate country that are blessed with a wide range of natural and cultural assets. Since it is blessed with so many assets, people who lived in the country each has their own responsibilities to take care of the environment. Therefore, the Malaysia government has come up with a campaign called “1MALAYSIA GREEN TOURISM, 1MALAYSIA CLEAN”. The reason for launching this event was to built up the passion of people in keeping clean the environment, especially tourist attraction destinations. This campaign was also based on the tagline “Think Tourism. Act Tourism” by Minister of Tourism, YB Dato’ Sri Dr, Ng Yen Yen (1Malaysia Green & Clean).

2.2.4 Community

2.2.5 Sustainable

2.3 The Butler’s theory

Time
Number of tourists
Exploration
Involvement
Development
Consolidation
Stagnation
(Rejuvenation)
(Continued stagnation)
(Decline)

Critical carrying capacity threshold

Source: Adapted from Butler 1980.

2.3.1 Exploration

An explanation from oxford dictionary described exploration as the action of searching an area for natural resources. This can also be explained as a tourist tried to explore a destination (tourist destination) for leisure or relaxation. According to Butler, the exploration stage is characterised by very small numbers of visitors who are dispersed throughout the destnation and remain for an extended period of time ( Lawton and Weaver, 2010).

In brief, exploration can also be described as the ‘pre-tourism’ or the starting of a tourist attraction destination where not many people are there yet and most of the people does not know about it. Visitors that went to the place will experienced the most rural kind of services whereby improvement have not been done yet. Most of the exploration usually started from urban area. Malaysia first exploration started in the 13th century when Malacca was founded by a Sumatran prince. The place later became the most influential port city in the Southeast Asia during that time. That is the place where traders from all part of the world gathered and that was the time Malaysia was exposed to other countries’ visitors. But after Malaysia being exposed, a lot of countries tried to conquer Malaysia due to its rich resources. After 138 years, Malaysia finally gained its independence in 1957and since then Malaysia has undergone a tremendous growth and prosperity since 1957.

2.3.2 Involvement

The involvement in here means that the involvement parties which may include visitors, government, or entrepreneurs. Local entrepreneurs will begin to provide a limited amount of specialised services and facilities in response to the appearance of tourists, thereby inaugurating an incipient tourism industry (Lawton and Weaver, 2010). Specialised services such as small eating places, inn, and maybe small transportation services might also be available. With these services, visitors might also be increasing but in a slow phase because things are still undeveloped.

The role of advertising will also started in this phase as it will induces a definable pattern of seasonal variation. The place will started to get mentioned in articles and brochures but the affected part are still considered a small area. Word-of-mouth start to spread in a slow manner.

2.3.3 Development

2.3.4 Consolidation

2.3.5 Stagnation

2.3.6 Rejuvenation or Decline

Rejuvenation

Decline

3. Methodology

The method that was used in completing this assignment includes web browsing. Several web search engine are being used frequently are Google, Yahoo and Wikipedia. These web search engine are only being used as a bridge to the information that we needed. Besides, government website are also being used frequently to acquire important facts and figures about the country. Website such as Malaysia Tourism Board, Department of Statistics Malaysia, and Malaysia Government Portal are where some of the facts and figures being collected.

Other than websites, the information was also collected from books that are available daily in our institute. Several books have been lent in order to complete this assignment. Books such as Tourism Management, Tourism Planning: Policies, Processes and Relationships, and Tourism Impacts: Planning and Management are noticeable throughout the assignment as citations are mostly quoted from these books. E-journal has also contributed quite some figure in this assignment whereby most of them are acquire through the institute research databases which are the MDIS EBSCOhost research databases.

4. Analysis and Discussions

Delhi has a rich history because in the past it has been ruled by some of the most powerful kings. The city’s history began with the creation of Indraprastha by the Panadavas. It has been said that this place was nothing more than a barren land, and it was turned into an excellent city by the Panadavas. As many other kings came into power, there was creation of some other cities like “Lal Kot, Siri, Dinpanah, Quila Rai Pithora, Ferozabad, Jahanpanah, Tughlakabad and Shahjahanabad. Over a period of time, these cities merged into one city, which came to be known as Delhi (Delhi City Guide, 2005, p.10).” Back then, the city became famous for overthrowing the rulers, who ruled it. After the Mughals rule ended, the Britishers started ruling the city. Edwin Lutyens, a famous Britisher was responsible for creating a new majestic city in 1911, which later came to be known as New Delhi (Singh, 2010, p. 4). Subsequently, the Britishers shifted their capital from Calcutta to New Delhi. It was made the centre of Government of India, after India got its Independence in 1947, and till date it serves as the Centre of Government. Over a period of years, the city has seen good economic growth. Taking advantage of this, many multinational corporations have set up their call centres in New Delhi and its neighbouring areas. This has transformed the city into a global city (u of t book source). Today, the “soaring skyscrapers, posh residential colonies and bustling commercial complexes add to the city’s metropolitan characteristic (Delhi City Guide, 2005, p.10).”

The first and foremost thing that the games have done is helped New Delhi develop; improve its sports and urban infrastructure. In preparation for the games, New Delhi had to ensure that the facilities for the visiting athletes were state of the art. Keeping this in mind, many of the existing sport venues were renovated and some were newly built. The Jawaharlal Nehru Stadium, which hosted the opening and closing ceremonies, was completely renovated to ensure world class facilities were there for the games. After renovation, the stadium was covered with a roof top and its seating capacity was increased to 78000 people (DelhiCommonwealth, 2010). The Indira Gandhi Stadium, which hosted wrestling and cycling games, was equipped with costly HD (high definition) screens so that the people around the world can follow the action in high definition. The Thyagaraj Sports Complex was the newly constructed stadium for the Netball games, with a seating capacity of around 5000 people (DelhiCommonwealth, 2010). In addition to the sports infrastructure, transportation infrastructure also improved significantly. Before the games, the traffic jams on the roads and highways, was a common sight and a cause of worry. However, that was solved by building 25 new flyovers, and by widening the existing roads. An underground tunnel was also constructed so that athletes can reach the stadium easily. The tunnel connected the “Athletes Village” (place where the athletes were staying) to the Jawaharlal Nehru Stadium. The main roads of the city also underwent major changes. Important roads leading to the airport such as Ring Road, Mehrauli-Mahipalpur and Mehrauli-Badarpur, were given a complete makeover (Uppal, 2009, p. 17). The airport of Delhi, Indira Gandhi International Airport was revamped, and one of Asia’s longest runway, was also constructed (Malhotra, 2009). Additionally, the metro network of the city was expanded, and it was termed the Phase II construction. Under the Phase II construction, the main areas of Delhi were linked to venues used for CWG games. Furthermore; the historical monuments and ancient buildings of New Delhi were overhauled to give the city an international look. India spent a large amount of money (approx. US$1.6 Billion) on the infrastructure, making this event the most expensive in the history of Commonwealth games (DelhiCommonwealth, 2010). The building of infrastructure for the Commonwealth games have come at a cost of destruction of slums. As Mike Davis (2006) points out in his article Planet of Slums, “The Indian capital offers brutal confirmation that the word ‘infrastructure’ is the new code word for unceremonious clearance of the fragile shelters of the poor” (p. 100). The slums located on the banks of river Yamuna such as Yamuna Pushtha were completely demolished to build the Athletes Village. The work on clearing the slums started in 2004, and lasted until June of 2010 (Housing and land rights network, 2010).

Secondly, the games have helped New Delhi in solving unemployment problems significantly. The plans were “formulated in such a way that more and more employment opportunities were created for jobless people with small capital (Maurya, 1989, p.68).” Around two million jobs were created due to the games in both private as well as public sector. The jobs ranged from “village development staff to support staff, from security to waste management, and from catering to accommodation. Also, the government departments of Delhi like Delhi Municipal Corporation (DMC), Delhi Jal Board (DJB), and the Delhi Metro Rail Corporation Ltd. (DMRC) started hiring people in large numbers, and contributed vastly in generating employment (Hudson, 2010, p. 5).” Even though the games benefitted most people by offering them employment, some were at the receiving end. The people like street vendors, who worked on the streets, lost their livelihoods as they were totally removed from the streets (Shah, 2010). This was done in order to show a clean image of New Delhi to the world. Moreover, some of the jobs offered to the poor workers who migrated from other states, were only temporary. As soon as the games got over, their jobs were lost and they were left in the lurch (Jackson, 2009).

Thirdly, New Delhi was able to address some of its environmental problems by hosting the ‘green’ Commonwealth games. New Delhi which was not considered clean some time ago is now a much clean and a green city, thanks to the government of Delhi and organizers of CWG. The organizers worked closely with UNEP (United Nations Environment Programme) and the government of Delhi, to implement various ecological codes, which not only made the games green, but also helped the city in becoming cleaner than before (Sriparna, 2010, p.87). The air pollution was significantly reduced by the introduction of buses that ran on Compressed Natural Gas (CNG). The CNG being the cleanest of all fuels reduced carbon emissions as well as guaranteed sustainable transportation (Sriparna, 2010, p. 87). The city was also able to reduce its water pollution through the cleaning of river Yamuna. Many sewage treatments plants were built so that the water flowing to river Yamuna could be treated and cleaned beforehand (IANS, 2009). The management of municipal solid waste was a big environmental issue before the games (Hust & Mann, 2005, p. 41). However, the government established number of schemes (Bhagidari being one), which helped the city effectively, regulate the solid waste. Most importantly, India built its first environmental friendly stadium, the Thyagaraj. During the construction of this stadium, all the environmental considerations were kept in mind. The considerations ranged from using eco- friendly fly ash bricks to conserving water through recycling (Sriparna, 2010, p.87). In some scenarios, the environmental concerns were also raised. The chances of city experiencing the floods increased dramatically because of the demolition of floodplains (piece of land controlling floods) of river Yamuna (Sharma, 2010). In addition to this, many trees were cut down (deforestation), which also caused irreparable damage to the environment (Singh, 2008).

Last but not the least; New Delhi’s economy received a major boost due to games as many tourists came to the city. New Delhi received “2 million foreign tourists and 3.5 million tourists from different parts of India (Arzoo, 2010).” The biggest beneficiary of rise in tourism was the hospitality industry. Large numbers of hotels were built in the city to accommodate incoming tourists, and that helped in generating significant amount of revenue, thus contributing vastly to the city’s economy (Awasthi, 2005).

In conclusion, it can be said that the games left behind their legacy in terms of infrastructure, and also played an important role in generating thousands of jobs. New Delhi will retain its status of global city if it keeps on building and developing the infrastructure. The government has already proposed some of the future projects. The city’s metro, which is now considered to be its lifeline, is set to expand in the coming decades. The Phase III and Phase IV construction projects are planned to be completed by 2025. After the conclusion of Commonwealth games, the tourism industry of New Delhi is set to grow by 5-10% approximately in future. Currently, the economy of New Delhi is booming, and it is predicted that this growth rate will continue in the next few decades (Singh, 2010). On the other hand; the population of national capital is growing day by day, and is expected to touch the 28.6 million mark by 2025 (WUP, 2009). In view of the increasing population, many new vehicles will be introduced. New Delhi is already one of the most polluted cities of India, and with its current patterns of urbanization, the pollution problem will only get worse in future. New Delhi will also see high levels of inflation in future, because with rapid increase in population, the resources will deplete and it will be hard to meet the increasing demands of people.

1.Get Sponsored to Travel!

Getting sponsored is an innovative and new way to travel around the world. By using fundraising sites such as Kickstarter, GoGetFunding, and FundRazr, you can raise all of your travel and expense costs to travel the world for free – all you have to do is to have an idea and to develop a proposal.

Crowd funding means using the resources of the crowd (that means you, me, and the billions of other users on the net) to finance your project. All it takes is for everyone to sponsor or donate a dollar, and before long, you can have thousands of dollars to fulfill your dreams!

When you upload your proposal, you can set the time span that you want it to run for, usually somewhere around 1–3 months. During this time of marketing your idea, you will receive steady bids and sponsors, with people offering to pledge as little as 5 dollars or as much as $500!

When you set up your proposal, you get to describe the different funding options. These are usually organized into levels, with different bonuses or advantages to each level. You might set the lowest option at $10 and the highest at $1500!

Each funding level should have a perk or advantage for the patron. Perhaps, you want to offer them a personalized guide brochure or limited-release prints or pictures of your travels. Some inventive proposals even offer T-shirts courtesy of CafePress, key rings, or mugs courtesy of Zazzle.com. Be inventive! The better the prize, the more likely you are to get funded!

2.Write a Travel Guide

Why not get paid to travel around the world? One of the ways that you can do this is by writing travel guides, for which you either will have your transport fees paid for you or will be paid in retrospect.

If you have ever heard of the Lonely Planet guide series, then you will know just how popular and successful travel writing is. In today’s world, there are now many more opportunities to become a travel blogger, or someone who writes articles and short journal pieces about where they are and what is happening to them for travel and adventure websites.

If you manage to land a major gig like working with Lonely Planet, then they will often pay your travel costs for you to locations that they need updated books for.

3.Review Hotels

An increasingly popular way to travel or more accurately to get paid to travel is to review travel locations. The theory is simple; hotels, hostels, and BnBs are always looking for positive reviews, so much so that they will ask online copywriters to write fake adverts for them if they are forced to! Remember that a negative review – just one – on an online travel site can sink or seriously damage hotels’ profits that season, so they need a constant stream of positive reviews from travelers just like yourself.

If wine reviewers and restaurant critiques get paid to write professional reviews, then why shouldn’t you do too, as a professional world traveler? The first thing you have to do is to start an online blog or review site, talking about your experiences around the world.

If you run an attractive, professional-looking blog with complimentary pictures, true stories offering well-sourced information, and links, then the chances are that you are already offering just the sort of service that a hotel needs.

What makes your proposition even more attractive is if you have an engaged readership and an established presence on social media sites such as Twitter, Facebook, Google, or Pinterest.

One of the most important things that you can do to achieve your goal is to research your destination. If you are going to travel to any of the world’s major cities, then you will be looking at hotels, holiday apartments, and studios, most of which will have websites. More rural locations will probably mean BnBs, resorts, or estate houses. Always go direct to the website or hotel itself rather than through a third party. The closer you get to the owner, the better chance you are likely to have of making an impression!

Remember to only target places to stay that you actually want to stay in! There’s no point settling for accommodation that you know you might hate, and thus, you and they have a bad experience! A part of this is also selecting places that suit your travel style – whether adventurous, luxurious, self-catered, and family.

Choose accommodation that already has some sort of social media presence, even if it is only a website and a Twitter. These are the ones who are actively going to be aware and familiar of travel blogging. Medium to large hotels and resorts are more likely going to have spare rooms that need filling than small, family-run BnBs. To put it bluntly, the small, family-run business probably depends on every individual visitor’s income!

4.Free Transport Abroad

Now that you are abroad on your free holiday, something to think about is how you plan to travel from one place to another. If you didn’t bring your own vehicle as a form of community taxi or car delivery, you’ll have to find ways to get about which isn’t going to burn a hole in your pocket!

How to Travel Abroad on the Cheap!

Hitching: Hitching is still the number one resort for groups of travelers, but not generally advisable for single travelers. If you are traveling as a couple or as part of a group, then I would certainly recommend it. If you are staying at a hostel or on a farm, you will probably find that there are others there who are willing to hitch, and you should soon get a lift to where you want to go. You will probably find that the further into the developing world that you travel, the more that hitching becomes a natural mode of travel, as many people cannot afford to own or run cars and instead operate them collectively and expect to give hitchhikers a lift. As ever, you should always keep your wits about you and keep your money secure in a money purse when traveling.

Walk or Cycle: Remember that the cheapest and easiest way to see the world is under your own steam! Many European cities now offer bike rental schemes, where you can unlock a free bike at just the cost of a pound or token, which you will get back as soon as you finish with your bike. There is always walking too – the best way to see a city!

5.Where to go for free?

While the travel, flights, and the accommodation are usually the biggest obstacles to your goal of traveling for free, the next most important concern is how you are going to survive and what you are going to do while you are out there. If you are already using one of the schemes like WWOOFing or hosting, then the chances are you already have got access to meals and a kitchen or indeed are even getting paid! It is worth, however, taking advantage of these other free opportunities.

Remember to Find the Free Days: Most of the world’s biggest attractions such as the Guggenheim or the Louvre have free days. This is usually part of their civic requirement for their own state- or government-level funding, so why not take advantage of this? By looking through the museum or attractions’ own website (sometimes only by signing up for a newsletter), you will be told when the free days, nights, or mornings are. There is almost always once a month and more around Christmas time!

Special Promotions: Remember that most attractions bring in not only tourists from abroad but also visitors from their host city and have to market to their host city. Remember to check local newspapers (i.e., if you can read the language) and the notice boards for special promotions, free meal tickets, and discounts. Most of these kinds of offers are coupon deals, so all that you have to do is cut out the coupon and offer it at the desk of where you are going!

Budget hotels was firstly born in the United States in the 1960s and introduced in United Kingdom in the mid 1980s with the opening of the first Little Chef Travel Lodge and the Ibis (Senior and Akehurst, 1991; McCaskey and Symes, 2004). Since then it has become the most developed and beneficial hospitality area to investors (Senior and Akehurst, 1991). Budget hotels normally have 50 to 80 rooms (Lincoln and Pettigrew, 1997) are called as medium-sized hotels with the popular names of Lodges, Motels, Inns or by more specific product names like Arcade (Lawson, 1995). Sometimes, the number of rooms of medium-sized hotels could be up to 120 rooms with an independent restaurant (Lawson, 1995).

According to the latest report of Mintel (2009), in the UK market alone, the budget hotel segment is worth over 1 billion pound with no less than 90,000 economy rooms. Moreover, Mintel (2009) also estimated that about 54% of the domestic traveller has stayed in budget hotel and with over 31 million overseas tourists visiting to UK per year, making this segment is very potential for investing.

Budget hotels is wanted by people because suppliers offer a good deal letting guests can get the facilities is equivalent to two-three star hotels, and the locations are safe and always in or near city centre (Imrie and Fyall, 2001). Therefore, it is easily seen that the budget hotel segment will become the stronger and more developed segment in the hospitality industry in the future.

As the table below shows, the increase in the number of rooms between 2001 and 2009 of the four leading budget hotels in UK. There is a remarkable rise in the number of both hotels and rooms of branded budget hotels in spite of the economic recession started in 2008, such as the leading budget hotel, Premier Inn has had increased from 23,300 rooms in 2001 to 40,000 in 2009, almost double times.

Table 1:

Source: Caterersearch.com (figures up to 31 August 2009)

Additionally, with 31% of fans who are interested in staying budget hotels and up to 37% customers who can stay wherever (Mintel, 2009).

Graph 1:

Source: Mintel, 2009

However, the high percentage of people who can stay any place makes budget hotel managers need to carefully consider into their marketing strategy to answer the question of how to pull customers back or in other words, how to remain the stable number of customers and probably turn them into loyal customers.

Marketing strategy of the main UK leading budget hotels

In term of marketing, the showed warranty helps new customers make decision with less worry and enriches existing customers’ loyalty (McCaskey and Symes, 2004). It is believed that doing marketing for small-medium sized hotels is more complicated and difficult than the bigger sized hotels (Moriarty et al., 2008).

However, the stronger growth shows that the UK budget hotels are on the right track of attracting customers, especially the leading budget hotels such as: Premier Inn (the leader of budget hotel), Travelodge, Express by Holiday Inn, and Ibis. Because of the unique characteristics of budget hotels, the typical marketing plan could not be applied. Budget hotel owners lure customers by showing improved facilities, competitive prices, and promotional campaigns (Mintel, 2009; Imrie and Fyall, 2001; McCaskey and Symes, 2004).

As Mintel (2009) reported that in the mid-2009, the tourism season, Premier Inn offer ?29 for two nights in conjunction with “800 top family attractions” which offered kids stay free and two for one treats.

Travelodge, in the early 2009, introduced a free iPhone application known as iBooker to make customers feel easier and more comfortable with the booking service of the hotel. Besides, the hotels gave out a business account card which contains an eight-week credit facility for repeated customers.

Ibis and Express by Holiday Inn also made some moves to attract new customers and keep existing guests. Express by Holiday Inn is the first budget hotel in UK offered free breakfasts for sleepers, called “Breakfast Express”. While Ibis advertised for their improved facilities: a new bed designed by Simmons Company and toiletries from Ecolable, known as with the slogan of “I care, Ibis cares”. Additionally, Ibis opened games to endorse its room rate sales.

All marketing campaigns have tried to impress consumers with competitive price and promotion but they still can get comfortable facilities.

Aims and objectives

It is recognised that the budget hotel segment in general and the UK budget hotel segment in particular is becoming the bigger and bigger hotel industry and getting more and more profit than any other industries.

The target markets they choose are businessman of nearby firms and/or SMEs. Besides, guests are all kinds of leisure tourists coming to UK such as youth tourists, travellers, non-organised tourists, and budget or economy tourists (Nash et al., 2006), which are mostly price-sensitive travellers with aged range from 15 to 60.

Despite the fact that the budget sector has developed remarkably so far and the amount of target market is quite huge and potential, the studies involving in service quality management, customer satisfaction, and customer repurchasing behaviour after experiencing in budget hotels are limited. Moreover, most of people think that choosing budget hotels just because of the best price they offer customers and/or are an option of budget-conscious travellers. People do not think that budget hotels could give them a good quality services. The budget hotels are believed that cheap price does not go with good service quality. So what is the reason making the UK budget hotel sector has developed like today? What is the attributes encourage customers to become budget hotel’s fans?

Reasons why the study is conducted to find out:

Realizing the key driver for the customers’ choice to budget hotels

After experiencing, what factors customers highly appreciate and feel satisfied most, price, facilities, location, or service encounters?

Most importantly, to identify the close relationship between customers’ experience and customer repeat purchasing behaviour. Making guests satisfied whether or not is enough to retain them?

Normally, these previous studies were conducted to measure and investigate the service quality and customer satisfaction depending on a comparison between customer expectation and customer experience. Customer will be satisfied only when their experience is at least similar to what they expect before. Additionally, most these studies largely focus on service quality in high-end hotel industry. There are few studies on deeply investigating on budget hotel segment. If there is, researchers mostly concentrate on the development of budget hotel sector: reasons and potential growth plan. Service quality, customer satisfaction, and post-purchase in budget hotel sector have had little attention from professional experts.

Hence, this study wants to know what customers feel satisfied after using the budget hotels through technical and functional outcomes. Besides, the study tried to investigate that what the key driver for customer when they choose to stay in budget hotel: cheap price or facilities or other factors? In addition, when they have a good experience whether or not they will come back to stay in that hotel? That is the big question the study wants to answer and link this to the future development in the UK budget hotel segment.

The important of the study

Since budget hotel segment was introduced into UK in mid-1980s and has reached about 50,000 rooms in 2001 and up to 104,180 rooms in 2009 (Mintel, 2009; McCaskey and Symes, 2004; Frewin, 2008). The incredible increase is resulted from the rise in cost-conscious traveller when the cheap airlines were born as a formula. Consequently, they can enjoy a flight travel with low-cost why they cannot enjoy an accommodation having both conformable facilities and affordable price. Furthermore, businessman, especially in SMEs, have paid more attention to and been aware of the travelling price than before.

With over 31 million overseas tourists visiting to UK including 6,532 thousand people for business travel purpose. For this reason, the UK budget hotel segment turns out to be the potential and beneficial investment area with the huge target market.

Graph 2: Value of budget hotel market, 2002-2012

Source: Mintel, 2009/ Market re-forecast- Leisure Travel-UK

The above graph shows the remarkably increasing value of budget hotel segment in UK so it is really meaningful to investigate how to remain the existing customers and attract the new ones with the aim of making this value keep rising even higher.

Chapter 2: Literature review
Background of the budget hotel segment

Comparing to other products, budget hotels are quite new product so they don’t have a fully comprehensive ‘budget hotel’ definition. There was a simple definition of budget hotels that are often small properties with basic and limited facilities served with standard low prices (Roper and Carmouche, 1989). Only one year later, in 1984, Lee added that budget accommodation was one of the fastest- growing segments of the industry which offers tidy, basic room, and a restaurant coffee shop is in most cases located nearby. Some years later, budget hotels was said to be a lodging with limited services offering the benefit of good value for money in standardised modern accommodation: their quality is as good as three or four star hotels and rates are 25% to 30% cheaper (Gilbert and Arnold, 1989).

In general, most of the researchers’ definitions have been quite similar that budget hotels offer minimal restaurant, no costly amenities like food and beverage services, meeting-room facilities, fitness centres, or other recreational areas but accommodation standards are good. Thef important thing budget hotels say to budget-conscious travellers is that although they provide the basics: no-frill hotels, it only costs very small amount of money and consumers still enjoy their sleep. Like the budget hotel model (appendix 1) showed budget hotel owners try to cut cost effectively and reasonably as much as they can. For example, like food and beverage segment they try to use vending machines or in-house bar that mean they still satisfy customers’ demand and keep the cost low. Budget hotels usually charge on per room, not on per person and no breakfast involving in room rate.

Budget hotels are known as medium-sized hotels and normally have minimum of 50 rooms, which offer reasonable and affordable price to most kinds of travellers (Jones, 2002; Mintel, 2007). Budget hotel segment is considered as a brand new hospitality product and its growth is mainly depended on three factors: branded product notion, service reliability, and value for money (Brotherton, 2004).

This sector has many different calls but people mostly know with the names of lodges, Inns, and motels (Brotherton, 2004; Mintel, 2007). However, it’s all understood that this kind of accommodation offers limited services and economy accommodation with low prices.

Its locations also range from beside main roads and/ or high- traffic sites to city centres where gathers a lot of office buildings and tourist attraction sites (Mintel, 2007). These locations are aimed at luring guests of businessman and tourists.

That’s why the budget hotels have got a fast growth after their appearance since 1970s. For example, alone American market, with 20,00 rooms the budget hotels accounted for 30% in 1970, then got an incredible rise in 1990, after two decades, this segment had 520,000 rooms (Fiorentino, 1995). UK market started later than USA, from 1985, but since then the segment has become the most dynamic and fastest growth rate among hotel groups.

Background of the UK budget hotel segment

The UK budget hotel sector has been considered as one of the biggest success sector in the hospitality industry in UK market over the last two decades, and expected to be continue that success (Brotherton, 2004; Frewin, 2008; Mintel, 2009). Today, the economy accommodation provision has become one of the indispensable segments of the hospitality market in general and the UK hospitality market in particular (Mintel, 2007; Mintel, 2009).

In the UK, budget hotel sector was introduced in 1980s with the first opening of the Ibis at Heathrow and the first Little Chef Travel Lodge (Fiorentino, 1995; Brotherton, 2004; Mintel, 2007; Nash et al., 2006). Since then it has been the most dynamic segment with the continuous increase in the amount of operated rooms. According to Brotherton & Shaw (1996), and Brotherton et al. (2002), budget hotel sector in the UK hospitality industry was the fastest growing hotel sector with an obvious evidence of the incredible increase in room number within about 10 years. UK budget hotel sector in 1992 only had 193 hotels with 7,326 rooms, in 2000 it raised up to 745 hotels with 40,375 rooms, an over triple-time increase (Brotherton et al., 2002). Moreover, according to UK Budget Hotel Survey showed that at the end of 2001, the budget hotel sector saw 847 brands of budget hotels expanded to 51,900 rooms with the promise of increasing the number of rooms to 86,080 in 2005, and they estimated that in 2003 the sector gained over ?870 million revenue (Brotherton, 2004). In fact, nowadays, this sector has gained over 1 billion per year for the UK economy (Mintel, 2009).

According to the latest report of Mintel (2009), there are four leading brand hotels: Premier Inn, Travelodge, Express by Holiday Inn, and Ibis with the number of hotels in 2009 are 577, 372, 105, and 51 respectively. Such an amazing growth in the budget hotel sector in the UK hotel industry but relative researches have been limitedly conducted so far. So far, budget hotels are thought to be a choice of people who are price-sensitive tourists or people who can stay wherever (Nash et al., 2006)

During the last decade, against a background of economic recession, budget hotels have been one of the most successful phenomena in the European hotel industry. In recent articles, they are often mentioned as a ‘boom’ or as representing one of the most significant trends in the international hospitality industry. However, many researchers said that comparing budget accommodation to other up-market segments, budget hotels are considered as only minor accommodation. Thus, few budget hotels are investigated and conducted surveys to enhance the customer satisfaction and improve its service quality.

Generally, it is not actually an insignificant hotel product, but it represents a new concept of hospitality provision which relies on specific key factors and that is increasingly affecting the industry on both sides, of provision and demand. There will have been a potential and great development for budget hotel sector in the future despite of the unstable economy.

Target groups of the UK budget hotel segment

There are two main kinds of target groups of the UK budget hotel segment which are businessman and tourists/ travellers, especially price-sensitive travellers are the main target of budget hotel sector in the UK market.

In Britain, it is estimated that about 31 millions of overseas tourists visiting to UK per year (UK Transport travel and tourism, 2009). Besides, each year there are over 100 million trips, including business, visit friends and/or relatives, and travelling, taken by the domestic tourists (The UK Tourist Statistics, 2009). In 2009 alone, it was reported that 126 million trips taken by UK residents, standing for 399 million bed nights (The UK Tourist Statistics, 2009). Hence, if these medium-sized hotels mainly target both foreign and domestic tourist travellers they can gain a lot of benefits from such the huge and potential market.

Senior and Morphew (1990) also did a research in the UK market and found out that budget hotel segment had been more and more popular with businessman. These people before only chose to stay in full-service, up-market hotels like three – four star hotels and now they have chosen to experience in budget hotels offering standard services costing lower price. This is the fact that budget hotel owners have not expected and this also showed that consumers who are both tourists and businessman are changing their habits for staying.

Looking at annual reports of the leading brands of UK budget hotels such as Premier Inn (Whitbread Group), Express by Holiday Inn (InterContinental Hotels Group), Travelodge (Dubai International Capital), and Ibis (Accor), it is easy to see the markets these leading budget hotels target to both budget travellers and businessman.

Like to be said in Mintel’s UK budget hotels report (2009), Mintel did interviews to find out customers’ attitude when choosing budget hotels and found out that there are four target groups. The group has the highest percentage (37%) is ‘wherever’ group who don’t care much about the accommodation, followed behind this is ‘fans’ group (31%) who, for some reasons, love to stay in budget hotels, and the two last groups are ‘one night only’ (19%) and ‘price is wrong’ group (13%) (Appendix 4). It showed that investment in the UK budget hotel segment has been still huge and potential with 31% of ‘fans’ group whose age is from 16 years old up to.

To businessman, there are more and more small enterprises but their network expanded far outside their location, which require their staff travel much more than before. Moreover, because of the small-sized business, so such business travel should be saved as much as they can to gain more profit for companies. To travellers, the new travelling generation is much younger, more curious, and keen on discovering so they prefer cheaper accommodation but still meet basic standards. This lodging helps them to be able to travel more places, aware of many new local things, and be close with the local life. As a result, the market of the UK budget hotel segment will be wider and more beneficial year by year.

Customer satisfaction

Customer satisfaction is said to be one of the most important factors in service delivery and plays an indispensable role in the success of hotels (Barsky, 1992; Chitty et al., 2007). Customer satisfaction directly affects on increase in market share from repeat purchase and referrals. Moreover, investing in a plan to attract new customers could cost much more than keeping existing customers (Chitty et al., 2007).

Customer satisfaction is defined as a comment or judgment to service providing a pleasurable level of consumption (Nash et al., 2006). Evans et al. (2006) said customer satisfaction is an opinion or a feeling of a consumer toward a service or a product after they have used them.

Normally, customer satisfaction or dissatisfaction will be measured through the discrepancy between customer expectation and customer experience (Choi and Chu, 2001; Nahs et al., 2006; Gronroos, 2007; Chitty et al., 2007). However, this study only wants to focus on the satisfaction level of guests when they experienced in budget hotels without assessing customers expectation. Features of budget hotels is quite different from other hotels, particularly in up-market hotels, budget hotels only provide basics, not offering breakfast or any kind of entertainment facilities so customers should not evaluate the satisfaction level in budget hotels base on their expectation.

Gronross (1983) divides the elements of satisfaction into two components of quality: technical and functional quality, while Reuland et al. (1985) separates into three levels of satisfaction involving in service features, staff performance and environment. There are quite a lot of ways to evaluate the satisfaction of experienced customers but the paper only focuses on functional, technical and price to identify what features make guests feel satisfied most.

According to Choi and Chu (2001) suggested that hotel quality such as cleanliness, location, room rate, security, and reputation are considered as important factors used by sleepers to assess hotel attributes of performance. In other situation, like a previous survey conducted by Lewis (1985) with 66 hotels, she found out that determinants guests took a serious consideration are hotel’s location and price. In 1988, Atkinson showed another order of determinants in choosing accommodation which are cleanliness, security, value for money, courtesy, and willingness of staff respectively.

Chitty et al. (2007) said that from four dimensions: Functional, technical, and price will identify the perceived value customer receive and then decide customers are satisfied or not (see appendix 3). After all, customer satisfaction would lead to repeat purchasing behaviour and then becoming into customer loyalty that would be a very important factor to any kind of enterprises.

Also, Gilmore (2003) presented service dimensions of hotels which show services hotels offer guests (see appendix 6). There are seven dimensions which are location, physical facilities, service products, price, hotel image, staff appearance, and staff manners. Therefore, customer satisfaction could be a feeling of customer affected by the seven elements hotels offer them.

With unique characteristics of budget hotels, offering limited service and small properties with low price so to appraise a satisfaction level of staying guests, it is suggested to rely on four factors: location, price, facilities, and service encounters.

Location

The location of hotel is to show the market this hotel targets, for instance if a hotel locates in city centre where has abundant office building and tourist attraction sites, this hotel should focus on businessman and general tourists (Gilmore, 2003).

Additionally, the location of a hotel must be easy to find when customers travel to the hotel. The convenience of finding a hotel’s location, the ease of parking facilities, the helpfulness and visibility instructions on the way leading to this hotel, and a wide range of kinds of transports go to the hotel’s location (Gilmore, 2003). They are all important factors influencing customers’ feeling when evaluating their satisfaction level.

In term of budget hotels, before the typical locations are known to be near main roads, motorway service areas, and/or high-traffic locations. Over the past ten years, the target market of budget hotels has expanded and changed, as a result, there are some hotels locate in city centre and tourist destinations (Mintel, 2007; Lawson, 1995). Features of these locations are aimed at meeting customers’ basic and vital demands so that hotels can lure more customers.

Price

The role of price in hotels is to catch the value of the services they offer in the guests’ minds. Through a price of services, customers will image and get a picture of what they probably receive later. Hence, hotel managers must set a appropriate price so they can not only cover the original cost and get a profit, but also be aware of what customer wait for with that price (Gilmore, 2003; Imrie and Fyall, 2001).

Price is considered as one of the strongest aspects to compete with other kinds of hotels. According to Fiorentino (1995), the price of budget hotel has to follow key rules:

The room rate is fixed,

Charging per room not per person (no breakfast included),

Frequently offering discount and/ or corporate rates

Through many survey conducted by Mintel during the past few years showed that price is one of the main motivations when customers choose a budget hotel, with 49% of 1,100 adults were interviewed (Mintel, 2007). All of these things illustrate the importance of price contributing to the development of budget hotels.

Physical facilities

A hotel provides guests a room and a bed to sleep in or all tangible objects are called as physical facilities (Gronross, 2000). Tangibles refer to physical facilities, equipments, appearance of staff, and courtesy of personnel are all things customers can see before they purchase services.

In the case of guests, technical dimensions what they receive from the hotels after they checked in. They are physical facilities such as parking, clean and comfortable room, TV room, laundry, and restaurant (Gronross, 2004). These facilities represent for the standard of that hotel and the cost customer has already paid.

However, facilities in budget hotels are completely different from other hotel sectors such as boutique hotels, up-market hotels and resorts, and casino hotels. When evaluating service quality in economy hotels, the paper only can refer to basics like bed, bathroom, TV room, laundry, and kitchen areas. Thus, customer satisfaction could depend on budget hotels’ characteristic.

For example, consumers staying in luxury hotels, it is definitely understood that this hotel has to offer all kinds of facilities for them ranging from food and beverage, full-furnished room to spa relaxing areas. Conversely, according to Fiorentino (1995), budget hotels just need to provide guests a smoking/non-smoking room with a bed, radio-TV, air condition, and a telephone, which is called as en-suite room. About food and beverage, hotels only need to offer vending machine or restaurants are close to its location. These things make customer quite satisfied (Nash et al., 2006).

Service encounters

Researchers have been conducted many studies to answer the question of ‘how has service quality been perceived?’ for almost two decades. According to Gronroos (2000), quality of any goods or service is what customers perceive and feel. It happens when interactions between consumers and service providers, which are called service encounters or functional dimension in a wider context (Gronroos, 2007). Functional dimension, or in other word is service process, is to show how a process of producing and consuming of services occurs

Unlike the technical dimension, this dimension, customers only can see after they purchase and use them such as the willingness to help and provide prompt service of employees, caring, and individual attention provided to customers, and reliability (Antony, et al., 2004). Parasuraman et al. (1985), and Suprenant and Solomon (1987) said that functional dimension including important components contributing to increase customer satisfaction.

Gronross (2007) said that service quality includes its outcome, process, and image dimensions customers experienced in hotels. He added that to evaluating perceived service quality is good or not, it is normally based on seven criteria:

Knowledge and skills of service provider,

Attitudes of service staff,

Distribution of the property,

Reliability,

Service improvement,

Servicescape, and

Credibility.

In other words, Chitty et al. (2007) divided them into the two main parts which are technical dimension (e.g.: distribution of the property, reliability, and price), and functional dimension (e.g.: knowledge and skills of service providers, appearance of staff, and service encounters).

Besides, there is a popular method for measuring customers’ experienced service quality called SERVPERF model. The model studies the link among service quality, customer satisfaction and purchase intentions (Baggs and Kleiner, 1996). It works by considering service quality as service performance and just simply interviewing consumers about their evaluation of the performance of the business process to collect primary data (Baggs and Kleiner, 1996). SERVPERF model uses 22 items to evaluate experienced service quality such as up-to-date equipment, should do as promised, appealing physical facilities, and prompt service to customers. However, the paper investigates the level of customers experiencing in budget hotels in UK market so the measurement method could be different.

Like the two studies of customer satisfaction levels in the budget accommodation sector of Nash et al. (2006) and Chitty et al. (2007) used totally new ways to approach customers’ experience. Nash et al. (2006) measure the level of customer satisfaction by designing a questionnaire based on seven main sections:

Length of holiday

Reason for holiday

Transportation

Accommodation

Spending

Information sources

Demographics

The result showed that after staying in these budget hotels, guests decided the elements of importance and satisfaction to them that are cleanliness of accommodation, value for money, and the presence of self-catering facilities.

While Chitty et al. (2007) applied the ECSI model to predict the level of customer satisfaction and customer loyalty in budget hotel segment. This study based on four dimensions like technical, functional, image, and price of service to assess customer satisfaction. Its findings suggested that brand image is a predictor of satisfaction with budget hotels, while perceived value indicates a degree of loyalty for the whole hospitality industry.

There are a lot of elements customers use to evaluate hotel service quality ranging from tangible to intangible objects. The study will use secondary information and combine with information collected from surveying travellers to analyse what the key attributes travellers appreciate when staying in budget hotels. Then, from these result makes a conclusion

Consequences of customer satisfaction

If customers experience well and have a good impression of hotels, they will help hotels in word-of-mouth advertising at no cost and repeat patronage (Evans et al., 2006). Moreover, the result of satisfaction may enhance a guests’ choice to use a particular brand of service on a given occasion.

There are quite a lot of research proved that most consumers choose to stay in economy accommodation just because they try to save their pocket. However, behind that choice, there are many reasons ranging from different culture, different aged, different class, and so on (Nash et al., 2006). Especially, recent surveys and studies showed that the higher the level of customer satisfaction is the more customers will repeat their purchase (Chitty et al., 2007; Nash et al., 2006; Antony et al., 2004; and McCaskey and Symes, 2004).

According to McCaskey and Symes (2004), Travel Inn (Travelodge owned by Whitbread) conducted many strategies like marketing plans, promotion programs, and upgrading facilities. As a result, in 2004, in UK market alone, the hotel recognised many progresses:

19,000 regular ‘loyal customers’ per year,

decrease 13% in guests having troubles,

the percentage of customer-staff encounter increased from 30% to 50%, which means customers feel its employees more helpful,

Customer satisfaction rate increased to 44% from 26%.

The hotel could be seen as the real typical example of using customer satisfaction to increase the number of guests, both in remaining old guests and attracting new ones.

The major players in the Indian hotel industry can be broadly classified into private players and public players. The major private players include Indian Hotels Company limited, East India Hotels Limited (The Oberoi group), Asian Hotels and ITC Hotels. ITDC and Hotel Corporation of India are the major public sector players.

Sector Outlook

Hotel industry depends largely upon the foreign tourist arrivals further classified into business travelers (around 65% of the total foreign tourists) and leisure travelers. The following figures show that business as well as the leisure travelers (both domestic and international) formed major clientele for hotels in 2004.

Over the last two years, the hotel industry has seen higher growth rates due to greater number of tourist arrivals, higher occupancy rate (being around 75% in FY’06) and significant increase in average room rate (ARR). The major factors contributing to this growth include stable economic and political conditions, booming service industry, FDI inflow, infrastructure development, emphasis on tourism by the central as well as state governments and tax rationalization initiatives to bring down the tax rates in line with the international levels.

Some of the main features of the Indian hotel industry include the following:

· The industry is more dependent on metropolitan cities as they account for 75% to 80% of the revenues, with Delhi and Mumbai being on top.

· The average room rate (ARR) and occupancy rate (OC) are the two most critical factors that determine profitability. ARR depends on location, brand image, star rating, quality of facilities and services offered. The occupancy rate depends on other seasonal factors.

· India is an ideal destination for tourists. Approximately 4.4 million tourists visit India every year. Thus the growth prospects are very high.

· In the hotel sector, a number of multinationals have strengthened their presence. Players like Four Seasons are also likely to enter the Indian market in the near future. Moreover, Indian hotel chains are also expanding internationally. A combination of all these factors could result in a strong emergence of budget hotels, which could potentially lower the cost of travel and related costs.

The industry can be classified into four segments:

· 5 Star and 5 Star Deluxe. These are mainly situated in the business districts of metro cities and cater to business travelers and foreign tourists. These are considered to be very expensive. These account for about 30% of the industry.

· Heritage Hotels. These are characterized by less capital expenditure and greater affordability and include running hotels in palaces, castles, forts, hunting lodges, etc.

· Budget Hotels: Budget hotels cater mainly to domestic travelers who favor reasonably priced accommodations with limited luxury. These are characterized by special seasonal offers and good services.

· Unclassified: These are low-priced motels spread throughout the country. A low-pricing policy is their only selling point. This segment accounts for about 19 % of the industry.

Trends In Hospitality Sector

Trends that will shape the future of hospitality sector are:

1. Low Cost Carriers

2. Budget Hotels

3. Service Apartments

4. Technology

5. Loyalty Travel

1. Low cost carriers: Travelers in general are more price sensitive to airfare than they are to hotel room rates. Often a low airfare will stimulate demand for travel even if hotel prices are increasing. LCCs are a good option for business travelers, as they have advantages like low costs, more options and connectivity.

2. Budget hotels: More than 50 per cent of occupancy of a majority of hotels comes from the business travel segment. The average room rate (ARR) realized from business travelers is normally higher than from leisure travelers. Heightened demand and the healthy occupancy rates have resulted in an increase in the number of budget hotels. Some of the new players entering into this category of hotels include Hometel, Kamfotel, Courtyard by Marriott, Country Inns & Suites, Ibis and Fairfield Inn.

3. Service apartments: The concept of service apartments, though a recent phenomenon in India, is an established global concept. Villas in Spain, flats in the UK and apartment complexes in the US have all created a viable market for those who want more than just a room in a hotel. Service apartments are the latest trend in accommodation, offering the comfort and convenience of a home without the hassles of having to maintain or look after it. Ideally suited for medium-to-long staying guests, service apartments are a natural choice for corporate employees or expatriates relocating to a particular city, non-resident Indians visiting the country for long spells and foreigners visiting the city for long durations.

4. Technology: Travel and technology have become inseparable. Technology is making its own advances with high-tech video conferencing facilities, web cameras and virtual reality mode of conferencing. On-line bookings, e-ticketing, Wi-Fi Internet connectivity, easy access to information, etc. are just a few areas where technology has completely changed the the way we travel.

5. Loyalty travel:Today, airline-credit card company tie-ups have brought a whole range of benefits to the travelers. These include insurance cover, upgrades, free tickets, access to executive lounges, and a host of other goodies.

ITC Hotels Limited
ITC Hotels:

· ITC Hotel Maurya Sheraton & Towers, New Delhi

· ITC Hotel Grand Maratha Sheraton & Towers, Mumbai

· ITC Hotel Sonar Bangla Sheraton & Towers,Kolkata

· WelcomHotel Mughal Sheraton, Agra

· WelcomHeritage ( These hotels are spread over all over india and are currently operating in Rajasthan, Punjab, Himachal Pradesh, Madhya Pradesh, Uttaranchal, Jammu & Kashmir, West Bengal, Tamil Nadu, Haryana and Karnataka.)

MARKET CAPITALIZATION

Month

High

Low

Average

July 2006

69470.81

61622.49

65132.68

August 2006

71935.59

63162.11

66907.27

September 2006

71616.29

68235.51

69865.82

October 2006

73136.79

69172.79

70595.60

November 2006

71870.11

66984.82

69353.40

December 2006

71557.75

63306.15

67001.52

Key Stats & Ratios

Quarterly

Annual

(2006)

Annual

(TTM)

Net Profit Margin

–

21.70%

–

Operating Margin

–

31.32%

–

EBITD Margin

–

34.70%

–

Return on Average Assets

–

18.35%

–

Return on Average Equity

–

26.75%

–
RECRUITMENT POLICY:

The potential candidates who are looking forward to build their career in ITC Hotels should possess several qualities like integrity, intellectual rigor, a ‘will do’ attitude, team skills, ability to think strategically, high energy, creativity and leadership.

For entry level, ITC relies on campus recruitments and visits various management and engineering institutes. Some of the institutes include IITs, IIMs, FMS, XLRI, etc.

ITC also provides summer internships. The internships are for a total of 8 weeks during April – July every year. For middle level opportunities, advertisements are placed on the company website and the interested and eligible candidates are invited to apply on-line. The middle management level provides opportunities in Marketing, Finance, Human Resources, Information Technology, Logistics and many more.

Indian Hotels Company

The Indian Hotels Company (IHC) is the parent company of Taj Hotels Resorts and Palaces. It was founded by Jamsetji N. Tata on December16, 1903. Currently the Taj Hotels Resorts and Palaces comprises 57 hotels at 40 locations across India. Additional 18 hotels are also being operated around the globe. During fiscal year 2006, the total number of hotels owned or managed by the Company was 75.

The Taj hotels are categorized as luxury, leisure and business hotels. The Taj Luxury Hotels offer a wide range of luxurious suites with modern fitness centres, rejuvenating spas, and well-equipped banquet and meeting facilities. The Taj Leisure Hotels offer a complete holiday package that can be enjoyed with the whole family.

It provides exciting activities ranging from sports, culture, environment, adventure, music, and entertainment. The Taj Business Hotels provide the finest standards of hospitality, which helps the business trips to be productive. They offer well-appointed rooms, telecommunication facilities, efficient service, specialty restaurants and lively bars, well-equipped business centres, and other conference facilities.

Management:

Chairman: Mr. Ratan N Tata

Managing Director & CEO: Mr. Raymond Bickson

Chief Operating Officer, Leisure Hotels: Ms. Jyoti Narang

Chief Operating Officer, Luxury Hotels: Mr. Abhijit Mukerji

Chief Operating Officer, Business Hotels: Mr. Jamshed S. Daboo

Vice President-Legal & Company secretary: Dev Bajpai

Chief Financial Officer: Mr. Anil P Goel

Financial Data
Key Stats & Ratios

Quarterly

(Mar ’04)

Annual

(2006)

Annual

(TTM)

Net Profit Margin

4.86%

11.93%

5.03%

Operating Margin

8.24%

16.75%

7.77%

EBITD Margin

–

29.11%

23.33%

Return on Average Assets

–

5.32%

–

Return on Average Equity

–

15.48%

–

Market Capitalization in last 6 months (Rs.crores)

Month

High

Low

Average

July 2006

6983.18

5883.71

6640.63

August 2006

7536.56

6745.18

7229.90

September 2006

8093.45

7482.83

7835.64

October 2006

8576.75

7911.81

8146.62

November 2006

9046.91

8080.31

8681.29

December 2006

9444.76

8400.55

9001.56

Four new hotels in Bangalore: Taj Group invests Rs.1,000 crore

The Taj Group of Hotels will invest about Rs 1,000 crore for constructing four new hotels in Bangalore. It has submitted an Expression of Interest to Delhi Airport International Limited (DAIL). The company has also submitted an Expression of Interest for building a top-class hotel in the airport vicinity. Besides the company has been allocated a site at Greater Noida for building a hotel, while it is keen on entering into a management contract for a hotel in Gurgaon. The Group was also eyeing to enter hotel business overseas like Maldives, Mauritius, Colombo, Boston and Sydney. The Group is also planning to explore seven more locations in Mumbai and increase its total room capacity to 2,000 in the commercial capital in the next five years.

This expansion of its budget hotels will generate numerous jobs in the industry. The group has also taken up the renovation and management of Rail Yatri Niwas, the well-known Delhi budget hotel owned by the railways, on a 15-year lease. As part of the deal with the Indian Railway Catering and Tourism Corporation (IRCTC), which currently runs it, the Taj group will renovate the Yatri Niwas and add food courts within the complex. The makeover will be done on a redesign-operate-manage-transfer basis. The hotel will be run under the Taj group’s budget hotel brand, Ginger, which has hotels in Mysore, Bangalore, Thiruvananthapuram, Haridwar and Bhubaneshwar. Taj group of hotels will upgrade all four Rail Yatri Niwas hotels located in Delhi, Howrah, Ranchi and Puri.

The Oberoi Group (EIH)

The Oberoi Group was founded in 1934 by Late Rai Bahadur M S Oberoi. The group owns and/or manages 32 hotels with 3,193 rooms under names of “Oberoi Hotels & Resorts” and “Trident Hilton”, a luxury backwater cruiser in Kerala and Oberoi Flight Services, a division of EIH that provides commercial in-flight catering and operates airport lounges and restaurants. It has branches in five countries, situated in two continents (Asia and Africa).

The chain operates the following hotels and resorts in India:

The Oberoi, New Delhi

Oberoi, Mumbai, Maharashtra

The Oberoi, Banglore, Karnataka

The Oberoi Amarvilas, Uttar Pradesh

The Oberoi Grand, Kolkata, West Bengal

The Oberoi Udaivilas, Udaipur, Rajasthan

The Oberoi Vanyavilas, Rajasthan

Wildflower Hall, Shimla, Himachal Pradesh

The Oberoi Cecil, Shimla, Himachal Pradesh

The Oberoi Motor Vessel Vrinda, Kerela.

The other businesses of EIH include:

· Mercury Car Rentals

· Corporate Air Charters

· EIH Press

· Mercury Travels

· Flight Catering

MARKET CAPITALIZATION
Key Stats & Ratios

Annual

(2006)

Net Profit Margin

22.32%

Operating Margin

30.45%

EBITD Margin

48.13%

Return on Average Assets

8.81%

Return on Average Equity

21.09%

The market capitalization of EIH as on march 21, 2007 was Rs. 3,748.74 cr.

Oberoi Group ventures into Middle East hospitality industry

Oberoi Group will run two hotels in Abu Dhabi and Dubai to tap the growing Middle East tourism market. Oberoi will manage a city hotel as well as one resort property in the UAE capital. The company has also signed an agreement for a hotel in Dubai, which is part of a 800- million-dirham property project being developed by Rani International. The company’s development plans are focused on the Middle East and Asia. It has 32 hotels in five countries and is planning to open new properties in several locations, including Marrakesh, Muscat, Maldives, Cambodia and Thailand.

It is also planning to launch its luxury cruiser on the Nile, The Oberoi Zahra, in October this year with an idea to redefine the paradigm of luxury on Nile. The Oberoi Zahra, Luxury Nile Cruiser comes with 25 luxury suites and two Grand suites. The Grand suites have their own private decks and outdoor Jacuzzis. With the Indian economy growing fast, Oberoi is also looking at a number of new sites in India cities, including Hyderabad, Pune, Bangalore, New Delhi and Mumbai. It currently has 11 brand hotels in India. Oberoi was also ranked ninth among the top 10 leading chains, hotels, resorts and spas across the world, according to the 2007/2008 World’s Top Hotels, Resorts and Spas survey report released by Zagat Surveys.

Radisson Hotels & Resorts

Radisson Hotels & Resorts: Radisson hotels are a worldwide chain of 435 hotels with a total of 102,000 guest rooms, in 61 countries. The first Radisson Hotel was built in 1909 and was purchased by Curt Carlson in 1962 and is still owned by his Carlson Companies. Radisson Hotels International is a fully owned subsidiary of the Carlson Hospitality Worldwide, which is one of the major operating groups of Carlson Companies Inc.Carlson Hospitality brands include – Regent International Hotels, Radisson Hotels Worldwide, Country Inns and Suites by Carlson, Park Hospitality, Carlson Vacation Ownership, and Carlson Lifestyle Living. Carlson companies also include the Carlson Wagonlit Travel, Carlson Leisure Group, Carlson Marketing Group and a worldwide marketing services company.

With more than 1520 hotel, resort, restaurant and cruise ship operations in 79 countries, Carlson Companies provide employment to 190,000 people in more than 140 countries.

Scope Of Hospitality Sector

In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing tourism market in the world. This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million. With this huge figure, India is becoming the hottest tourist destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.

GDP

Employment

Visitor Export

Personal T&T

Capital Investment

Govt. Expenditure

Outlook for 2006

7.80%

1.40%

10.90%

6.90 %

8.30%

7.70%

Outlook for 2007-2016

6.60%

1.00%

7.80%

6.70%

7.80%

6.60%

Future of hospitality sector:

To boost up the growth of tourism in India, the government has proposed to invest Rs. 520 crore in 2007-2008. Tourism in expected to grow further over the next few years due to the changes taking place on the demand and supply sides. The factors that will account for the further growth of tourism will include the following:

· Change in standards of living

· More disposable income

· Better education

· Long leisure time

· Aging population

Owing to growth of tourism sector, infrastructure will improve, competition will increase, new products will come into markets and better services will be provided. Due to the rapid growth in tourism, the hotel industry is also booming. Many international players like Le Meridien and Accor are heading towards Indian markets to expand their business. With government’s full support in developing infrastructure, increase in demand, open sky policies and increased competition, the hospitality industry is getting consolidated and has many more opportunities to grow further.

Challenges For Hospitality Industry

1.Shortage of skilled employees:One of the greatest challenges plaguing the hospitality industry is the unavailability of quality workforce in different skill levels. The hospitality industry has failed to retain good professionals.

2.Retaining quality workforce:Retention of the workforce through training and development in the hotel industry is a problem and attrition levels are too high. One of the reasons for this is unattractive wage packages. Though there is boom in the service sector, most of the hotel management graduates are joining other sectors like retail and aviation.

3. Shortage of rooms: The hotel industry is facing heavy shortage of rooms. It is estimated that the current requirement is of 1,50,000 rooms. Though the new investment plan would add 53,000 rooms by 2011, the shortage will still persist.

4. Intense competition and image of India: The industry is witnessing heightened competition with the arrival of new players, new products and new systems. The competition from neighboring countries and negative perceptions about Indian tourism product constrains the growth of tourism. The image of India as a country overrun by poverty, political instability, safety concerns and diseases also harms the tourism industry.

5. Customer expectations: As India is emerging as a destination on the global travel map, expectations of customers are rising. The companies have to focus on customer loyalty and repeat purchases.

6. Manual back-end: Though most reputed chains have IT enabled systems for property management, reservations, etc., almost all the data which actually make the company work are filled in manual log books or are simply not tracked.

7. Human resource development: Some of the services required in the tourism and hotel industries are highly personalized, and no amount of automation can substitute for personal service providers. India is focusing more on white collar jobs than blue collar jobs. The shortage of blue collar employees will pose various threats to the industry.

For this project the discussions are on the topics of quality service in the hospitality industry, to know the importance of the topic in addition community based tourism and also the main factors that attract tourist to the Caribbean. In putting this assignment together the researcher visited online websites and the library to gather information.

This project will show you more in depth details about the topic and is set to educate the individual doing the project as well as others.

THE IMPORTANCE OF QUALITY SERVICE IN THE HOSPITALITY INDUSTRY

The main function a hospitality organization member must perform is the delivery of quality service to its customers.

Service quality has been defined has how well a customer’s needs are met, and how well the service delivered meets the customers expectation.

The delivery of quality service in the hotel industry is an important factor of successful business. Treating your guest with care and providing an exceptional place for them to enjoy is part of the reason they will come back again. When tourist comes through your doors, they expect quality in every aspect of the hotel. Guests are looking for value in the things they see, taste, and touch and so providing them with exceptional quality will certainly leave a lasting expression.

The customers experience from the time they enter the hotel until the time they walk out the doors should be of utmost importance. Food and beverages, communication and ambiance are a few areas that require the delivery of quality service. What the hotel or attraction area offers is probably the biggest indicator of quality that a customer notices. What the hotel has to offer is not only important to customer’s impression but the overall experience, but it is important for their health as well. Guest’s health should never be compromised. Speaking to the customers should always involve the paramount respect and courtesy. This goes for all workers, however hotel workers should use respectful titles, such as “sir” and “mam” be optimistic and speak with a smile, never interrupt or talk over a guest conversation if you can help it, know your hotel so you can speak intelligently and educate guests, listen with respect and care to what the customers have to say, be sure you ask questions to clarify a customer’s order if there is any confusion and be honest and straight forward with customers at all times, especially if there is a problem.

Customer’s satisfaction is the customer’s fulfillment response to a service. Tourists are more knowledgeable in evaluation the quality of hotels and attractions by making comparison between competitions. Meeting of customers’ needs by delivering quality service is the key to every successful business. In order to meet the customers’ expectations and later satisfies them, customers’ needs are required to be recognized and met first with quality service.

The bottom line is always that the customer expects excellent service from an organization not just only the hospitality industry or they will take their business elsewhere. Providing positive experiences for the customers will keep them committed and loyal to an organization. It almost goes without saying that delivering quality service is essential in sustaining any business and not only just the hospitality industry. No matter how wonderful a job you do of attracting new customers, you won’t be profitable for long unless you have a solid customer retention strategy in place and in action. It’s the actions that count, not what you will do or what the policy says. People will remember what you or your employees have not or not done. If you build a reputation that will separate you from your competitors because you have higher standards, is consistent in delivering quality service and respond and meet the needs of your customer’s you are an example of good quality service.

COMMUNITY BASED TOURISM

A community by definition implies individuals with some kind of collective responsibility, and the ability to make decisions by representative bodies.

Community based tourism is tourism in which local residents (often rural, poor and economically marginalized) invite tourists to visit their communities with the provision of overnight accommodation.

Community based tourism enables the tourist to discover local habitats and wildlife, and celebrates and respects traditional cultures, rituals and wisdom. The community will be aware of the commercial and social value placed on their natural and cultural heritage through tourism, and this will foster community based conservation of these resources. (responsibletravel.com)

In community based tourism, villagers and tourists learn from each other, share their experiences of the different ways of life and actively learn about their cultures. Interaction usually takes place mainly in the rural areas. Community involvement tourism may range from bed to breakfast accommodation in a rural home to create income generating opportunities for the entire community. (jtbonline.org). Community based tourism gives tourists the opportunity to discover local habitats and wildlife, and celebrate and respect traditional cultures, rituals and wisdom.

The community will be aware of the commercial and social value placed on their natural and cultural heritage through tourism, and this will foster community based conservation of the resources. (The driver of change in the Jamaican economy, (Kenneth O. Hall))

This fostered greater interactivity, built cross cultural bonds, respect and understanding, and gave authenticity to a country’s lifestyles, while creating a source of income for the host families. (tpdco.org)

(mader)(www.eHow.com)Technically, Community-based tourism is the development to empower people to be more aware of the value of their community assets.

This will definitely foster economic growth to a country economy.

PRO’S AND CON’S OF COMMUNITY BASED TOURISM

Community based tourism indeed have its advantages and disadvantages.

Community based tourism will provide employment for community members in that things being in place for tourist to enjoy has to be in good management and running so jobs like janitors, chefs ,waitresses will be provided in the hotel sector. And with job being provided for locals the standard of living and surviving will be easier.

Locals interest to conserve their living environment will be increased, knowing that your community is a place of tourist attraction it will be of your will to keep the place in order so it will be available for future use and to know that tourists enjoy what they have been given so they would want to come again so this is beneficial to you and the country. Tourists go to a place to get good quality and to enjoy the products offered, locals will be therefore motivated to conserve their living environment.

Overcrowding of an area may lead to fights. For example, in parts of Kingston, the capital of Jamaica, there is known to be a very high crime rate as a result of overcrowding of the area. Visitors may get threatened by locals and vice versa. This may pose a problem in the country as visitors will return to the home countries with a bad reputation of the host country, in this case, Jamaica. Also, CTB may place a pressure on natural resources to facilitate and improve on rural infrastructure that will accommodate visitors.

Though CTB gives back to a country positively, it also has cons which have implications on Jamaica as a whole. Very often, communities are not entirely aware of the value and assets they have that are of interest to visitors, a part from their lack of production and/or marketing skills.CTB invites visitors from all over the world to come to their communities and this may cause the community to become overcrowded, also pressure on human resources can cause a negative impact on community based tourism. (Understanding Tourism, Ron Mader).

Community based tourism is a good stepping stone for country’s that has the available resources and those that can get their resources, it has its ups and downs but with the right strategy and the right resources it can work and will be successful so the country goals can be achieved and the economy will be a better one.

MAIN FACTORS THAT ATTRACT TOURIST TO THE CARIBBEAN

The Caribbean is one of the most popular tourist areas in the world, due largely to the incredible natural beauty and wildlife, which attract hoards of vacation-hungry visitors all year long. Year after year, millions flock to the small, picturesque islands of the Caribbean. World-renowned for their laid-back, affable ways, travel to the Caribbean is for those who want to make a point of taking it easy. Mile after mile of bleach-white sand leads to the ethereal blue waters that make the region famous. The ubiquitous presence of fruity rum drinks doesn’t hurt, either. Return visitors are common here, and there’s no mystery why. Besides, Caribbean travel offers so many different kinds of culture and history that one trip is not enough to see it all.

The Caribbean offers a lot of things you can get and enjoy for wonderful vacation.

The Caribbean is also home to resorts that are tailored to meet every need imaginable. Are you looking for a family friendly resort? You can find one. Are you looking for an adult only resort? You got it. Are you looking for a resort that is built for romance? Those are widespread on the Caribbean islands as well. Perhaps, the greatest reason why you should plan a trip to the Caribbean is because of all inclusive vacations. You have a number of different staying options. Vacationing along the beach sounds nice, but how does vacationing along the beach with all of your food, drinks, entertainment, and tips included sound? Prettyamazing Many go to Jamaica, but no further. Others choose the Cayman Islands. But every island has such a fiercely unique identity that is hard to see just one – the experiences you have on Aruba, are going to be far different than if you visit Guadeloupe. (jtboline.org)

When it comes to cost of travelling tourist find that coming to the Caribbean is a lot affordable than taking a vacation elsewhere for example taking a trip to Paris will in that accommodations are more expensive than the tropical Caribbean island.

When it comes to accommodation the Caribbean has variety to choose from for your special vocation needs.

A large percentage of tourists come to the islands having purchased Caribbean vacation packages and while these are easily the best and comfortable, allowing you to take in the luxury of the coral reefs and palm trees, there are many different types of ways to enjoy the islands. When vacationing in the Caribbean, you will find no shortage of activities. While each island has its own unique attractions, there are many activities that are commonplace, no matter where you end up such as swimming, tennis, volleyball and diving. The beauties of the Caribbean islands are another reason why tourist vacation there. It is a beauty that is undeniable. Although the beauty, alone, is enough reason for many to travel to the Caribbean, it is unstoppable when combined with the climate. Tropical weather all year round is a dream come true for travelers. Even in the off-season, you are sure to find beautiful weather that is accompanied by amazing travel deals. The most ambitious, if not popular, approach to Caribbean travel is to get an air pass granting unlimited travel for a selected period of time (usually a month). This way you are free to see a number of islands on one trip. Tired of St. Lucia? Hop a 20 minute plane ride over to Barbados. Or try to get to Trinidad for carnival. Stay a few days on Martinique, and see what Paris would look like if it was located on a kissed beach and it was 80 degrees every day. Or fly to the British Virgin Islands and escape onto deserted coves where you won’t see another human for days. (www.eHow.com)

Tourist come to the Caribbean for a lot of reasons like vacation & to relax or because they just want to view the beaches & the lovely waterfall tourist just come to the Caribbean to see the nature.

CONCLUSION

It is concluded in this project to show that the Caribbean depends heavily on tourism for their economy growth, it contributes widely to the development of the country’s environment, infrastructure wise and the development of the opportunity for less poverty has to where job provision are concerned.

Community based tourism is concluded to be something good to a community reason being, tourist and locals get to be educated about each other and the communities get a lot of popularity and get a chance to be out there. In addition we know that in this way jobs are provided for locals so the society will be a less poverty one.

Tourist comes to the Caribbean for so many reasons for enjoyment, relaxation, the weather and all other factors that include tourist having a wonderful and warmth experience in the Caribbean.

BILIOGRAPHY

(n.d.). Retrieved from tpdco.org.

(n.d.). Retrieved from www.eHow.com.

(n.d.). In R. H. Kenneth O. Hall.

(n.d.). In r. mader, understanding tourism.

responsible travel.org . (n.d.).

Tourism has long been the primary industry on the majority of the Caribbean islands due to the largely incredible natural beauty and wildlife which attracts hoards of “vacation hungry” visitors all year long.” (Sophia Southern, n.d.). Tourism accounts for a large amount of the Caribbean’s economy and work force.

The most important tourist centre in the Caribbean are Puerto Rico, the US Virgin Island, Jamaica, The Bahamas and Barbados.

Tourists are attracted to the Caribbean for many reasons some of the main factors are:

Geography – The Caribbean which extends from the southern tip of Florida, pass the Gulf of Mexico and down to the north-eastern tip of South America, attracts a lot of visitors each year. The Caribbean has numerous landforms such as islands, mountains, waterfalls etc.

Weather -The Caribbean has a tropical marine climate which gives it an all year round sunshine and this makes it perfect for the winter visitors. The equator gives the Caribbean temperatures `between 27-32°C. It is called marine because of the influence of the sea. During the day the sea is usually cooler than land. Winds blowing from the sea. This is one of the biggest reason why tourists are attracted to the Caribbean, The climate attract tourist to the Caribbean during the winter period their country

Tourism activities in the Caribbean have traditionally centre around the promoting of coastal attractions: beaches, coral reefs, coastal water.

Beyond the beauty of the beaches, its sparkling blue water and attractive coral reefs, there are lush tropical rainforest, volcanic, a rich cultural heritage

Culture and Sandy Beaches

The Caribbean culture is

The white sandy beaches of the Caribbean islands are a magnificent sight to see and parallel to none. The Caribbean is well known for its fine grained, soft white sand

The opportunities of water sports – When tourist come to the Caribbean they want to try water activities such as swimming, sailing, and snorkelling

Community-based Tourism

Community tourism is not a recent phenomenon, it dates back to the early days of travel when travellers were accommodated in monasteries, inns, homes and hostels. Community tourism is dependent on the community itself its attitude towards tourist is recognition of the value of tourist business and the steps it takes to stimulate and promote it. It requires the involvement of the community as a whole and a strong working relationship with the tourism sector.

Community-Based tourism exists and can only be successful when there is a participation of the community in which the product is located. There can be full participation meaning that the community controls tourism in their local or limited participation of the community personnel. (Teaching Tourism in the Caribbean, December 2000)

Why Community Based tourism

Jamaicans sometimes feel left out from the tourism industry and do not believe that they benefit from the tourism therefore it is important for individuals to become stakeholder as they will now have a reason to protect and sustain the industry.

Community tourism is identify as an avenue to sustain growth, environmental sustain-ability enhanced visitor experience and community development. This would result in it being an inclusive industry where the benefits from tourism are spread more widely. (Team Jamaica, 2000)

Benefits of Caribbean based tourism

Increased employment both directly and indirectly.

Increased opportunity for social and cultural intercourse.

Increased income – the improvement of infrastructure and enhancement of the community

Improve quality of life

Principles of Community Tourism

Community Tourism is a new appearance. It is a spirit that spread throughout all sectors of the tourism industry. Community Tourism is about levels of relationships between the host country and the visitor.

What is appealing to the visitor is found among the varied natural attractions, local resources and talents, and indigenous attributes of a community or area. Through visitor-community interaction, respective cultures are explored, ideas and information are exchanged, and new friends are made. (http://www.communitybasedtourism.info/en/community-based-tourism/community-based-tourism.asp, n.d.)

Community Tourism fosters opportunities at the community level for local people wishing to participate more fully in the tourism industry. This may range from organising bed & breakfast accommodation in a rural home to creating income-generating tourism opportunities for an entire village.

Community Tourism is managed tourism in its profoundest sense, taking into account evolving travel trends in such areas as the environment, study and research, seniors travel and other special interests.

Community Tourism products and services are geared to address these trends and to satisfy the interests of emerging travel markets. Key clientele includes:

The mature market

Study and Research groups, including schools, universities, colleges and research based organizations

Church groups

Environmentalists, botanist, ornithologists and nature lovers

The independent traveller

Afro-Americans

Caribbean Nationals – at home and abroad

The vision of Community Tourism is to expose the local resources and talents, and make the concept a reality for local people. Community Tourism embraces eco-tourism, cultural tourism, adventure tourism, recreational tourism, geo-tourism, heritage tourism, health tourism, farm tourism and all the popular special interest tourism.

Community-based tourism, therefore, is a combination of tourism products offered at a community-level to domestic or international visitors. In the Jamaican context, community-based tourism usually refers to visitor interaction with local people in the rural areas outside of the traditional resort areas. Community-based tourism does not mean that the rules that apply to traditional tourism sub-sectors do not apply them. The principles of health and safety for visitor’s drive tourism regardless of the setting in which the product is offered.

Community-based tourism, however, offers a unique opportunity for Jamaica. The process of community-based tourism development if managed effectively has the potential to alleviate poverty and illiteracy. Community-based tourism also has the potential to develop the natural creative energy of Jamaicans by transforming average citizens into entrepreneurs. It can be used to develop strong partnerships by twinning existing traditional tourism entrepreneurs with aspiring non-traditional tourism entrepreneurs. It can be combined with the existing tourism product offerings to create a uniquely Jamaica experience. Community-based tourism can be a stand-alone venture or a partnership of the traditional and the non-traditional products blended with Jamaican charm, culture and heritage to create a community tourism spirit that culminates in a truly Jamaican experience. Community-based tourism can bring out the best in the Jamaican people

In developing community-based tourism products it is essential to understand that:

Local conditions, culture and knowledge will influence the outcome.

Each community has its own identify and values.

Tourism works within a system.

The tourism system defines the rules for local tourism.

Developing a business is a process.

International standards play a significant role in product development and marketing.

Each agency on the team has a specific role to play in the development of the community-based tourism product.

Failure to learn the rules and to manage effectively and efficiently the process results in failure at the local and national levels.

External Challenges

Global competition for tourism business

The forces of globalization advocate the free movement of goods/services, capital and labour by opening up the world markets for trade.

Globalization has expanded global corporate reach and control.

The challenge is that the region now has to invest in meeting international standards.

Worldwide the hospitality industry is having difficulty attracting motivated and dynamic employees because of its image as primarily offering low pay, low status jobs, with long, demanding working hours and difficult working conditions.

Modern technology is rapidly changing the way business is conducted in travel and tourism. With the increasing use of computers by businesses to gain competitive advantage and the dramatic increase in the use of the Internet by travellers, tourism businesses have to invest in the new technologies and train their people in the use of these technologies to remain competitive.

The use of distance learning is revolutionizing campuses worldwide as, through the use of multiple technologies.

Special attention needs to be paid to addressing the human resources needs of small, medium and micro tourism businesses in the region which make up the bulk of the sector, and which are locally owned and managed for the most part..” (Morgan, CTO, 2001)

The Hospitality Industry faces three major but interconnected challenges, namely globalisation, the growing importance of knowledge as the engine of economic development and national prosperity, and the impacts of the information and communication revolution, all of which have striking implications for education institutions and economies.

Polytechnic West has risen to undertake the above challenges with the introduction of the Associate Degree of Hospitality Management. The course aims to combine current industry practices, combined with a rigorous vocational and academic course curriculum required of managers to face these challenges. The course curriculum focus on hospitality operational skills, management best practice, and the skills needed for continued learning in an ever changing environment.

In The Associate Degree of Hospitality Management the assessments are mainly by examinations, presentations and tutorials. The questions are developed with the goal of assessing not only the student’s awareness of current theory and practice, but to evaluate the degree of reflection and analysis that may contribute to its operational application. The learning environment for the Associate Degree Hospitality Management is conducted in small classes and highly qualified lecturers with relevant industry experiences.

The qualifications offered by Polytechnic West is a two year Associate Degree Hospitality Management program which has a direct pathway to the final year in the Bachelor of Commerce majoring in Hospitality and Tourism at Murdoch University. Alternatively the Associate Degree in Hospitality Management is a recognised management qualification which prepares graduates for rapid career advancement within the Hospitality Industry given sufficient experience.

The tourism and hospitality industry is a sphere in which attainment of supervisory and management positions can occur at a young age with relevant experience and qualifications. As an Associate Degree graduate, there can be multiple career opportunities and directions which include supervisory and management roles in food and beverage, event management, accommodations, marketing and Human resources in the hospitality sector.

Learning Resource Centre
Bentley Campus

Telephone: 9267 7240

http://library.polytechnic.wa.edu.au

Opening Hours

Monday – Thursday 8:00 am – 5:45 pm

Friday 8:00 am – 4:15 pm

Off Peak Periods 8:00 am – 4:00 pm

CLOSED

Saturday – Sunday and Public Holidays

Resources

Each course has a Unit Information Outline booklet which lists the resources required for the unit. These can be obtained from the Course Co-ordinator.

Referencing

Chicago referencing, based on Chicago Manual of Style (2003) will apply to all assignments. This manual constitutes the authoritative international guide to publication standards and style. At Polytechnic West we respect the ideas of others by acknowledging them with proper referencing. This includes using the work of other students with, or without, their permission. Students must abide by all assessment rules set by lecturers. Any student found cheating in any way will face disciplinary action. Assignments and other forms of assessment must be your own original work. Copying directly from your research sources or another student’s work, without acknowledgement is plagiarism. Plagiarised work will not be accepted and will result in disciplinary action.

Turnitin software is available for students to check their work and will be utilised by lecturers to check for plagiarism.

Assessment

To be awarded this qualification you must pass all the course units.

Assessment criteria are provided for each unit in the relevant Unit Information Outline. All assignments will be returned with feedback on the student’s performance and the criteria against which the final mark was determined.

Submission dates will not be altered unless lecturer consent has been obtained.

Results

Students are entitled to see their results in all assessment components of their unit, including raw marks for components and for the unit overall. Students may inspect their marked examination scripts and discuss the marking with the lecturer, or nominee, within fourteen days of the posting of results. Lecturers may require reasonable notice or set aside specified times for this. Where a lecturer is away from campus in the two weeks following the posting of results, another member of academic staff must be designated to handle inquiries and be provided with detailed assessment information to facilitate this. Lecturers must retain examination scripts until the end of the following semester.

Submission and Receipt of Assignments:

submit a cover sheet with all written work for continuous assessment which includes a signed declaration of authenticity;

ensure delivery of the assessment work to the secure location provided; and

maintain a copy of all submitted work until at least the expiration of the appeal period.

Penalties may also apply when an extension is granted; refer to the Course Co-ordinator for details.

Grading System

Final results in all units shall be reported according to the following system of letter grades:

Final Grades
Letter
Grade
Interpretation
Application

Academic transcripts will include both the grade and final mark for all students.

HD

High Distinction

Exceptional performance indicating complete and comprehensive understanding of the subject matter; genuine mastery of relevant skills; demonstration of an extremely high level of interpretative and analytical ability and intellectual initiative; and achievement of all major and minor objectives of the unit.

80 – 100%

D

Distinction

Excellent performance indicating a very high level of understanding of the subject matter; development of relevant skills to a very high level; demonstration of a very high level of interpretive and analytical ability and intellectual initiative; and achievement of all major and minor objectives of the unit.

70 – 79%

C

Credit

Good performance indicating a high level of understanding of subject matter; development of relevant skills to a high level; demonstration of a high level of interpretive and analytical ability and achievement of all major objectives of the unit; some minor objectives may not be fully achieved.

60 – 69%

P

Pass

Satisfactory performance indicating an adequate understanding of most of the basic subject matter; partial development of relevant skills; adequate interpretive and analytical ability and achievement of all major objectives of the unit; some minor objectives may not be achieved.

50 – 59%

UP

Ungraded Pass

Successful completion of a unit assessed on a pass/fail basis, indicating satisfactory understanding of subject matter; satisfactory development of relevant skills; satisfactory interpretive and analytical ability and achievement in all major objectives of the unit.

50% or above

N

Fail

Unsatisfactory performance indicating an inadequate understanding of the basic subject matter; failure to develop relevant skills; insufficient evidence of interpretive and analytical ability; and failure to achieve major and minor objectives of the unit.

Below 50%

DNS

Fail

Failure to submit any assessed work after the withdrawal date and failure to withdraw prior to the withdrawal date.

Did not participate in any assessments

S

Supplementary

The award of the grade ‘S’ shall be at the discretion of the Higher Education Board of Examiners.

45 – 49%

Interim Grades
Letter
Grade
Interpretation

G

Good Standing

A result of good standing (G) must be reported only at the end of the academic year where all results in that enrolment option are not due to be completed until the end of the first or second semester of the following year.

NA

Not Available

A result of not available (NA) must be reported only where:

a delay is caused by the unavoidable absence of the Higher Education Course Coordinator;

where an examination script has yet to be received by the College;

where the final grade is under consideration due to disciplinary action or administrative encumbrance;

where the Higher Education Board of Examiners has approved assessment in that unit taking place after the assessment period for that semester, including where the repeat of a component (e.g. involving practical work or a placement) cannot reasonably be arranged within the semester period.

The Higher Education Board of Examiners has the sole discretion in determining whether a supplementary assessment is to be allocated; it is not an automatic right of the student. However, the supplementary assessment discretion will be applied to all students in an equitable manner.

The nature of any supplementary assessment will be at the discretion of the Higher Education Board of Examiners. The only grades available after supplementary assessment are a P or N. An ungraded pass is not available.

S

Supplementary

A result of supplementary assessment (S) may be reported where the student has a borderline fail grade (45-49%) for the unit. The timing of any supplementary assessment will be at the discretion of the relevant Higher Education Course Co-ordinator.

Q

A result of deferred assessment (Q) shall be reported only where deferred assessment has been approved by the Higher Education Course Coordinator.

Initial unit assessment advice shall indicate whether or not moderation may be applied to the unit assessment. Final grades will be rounded (0.5 and above up, 0.49 and below down). Individual assessment components must not be rounded and only be submitted as whole percentages. Final numerical marks are to be presented as a whole number.

Student Rights and Responsibilities

It is the responsibility of every student to be aware of the policies and procedures that relate to their rights and responsibilities as a student. These can be found in the student handbook and on the Polytechnic West website.

www.polytechnic.wa.edu.au

Client Services

Client Services staff can help you make your further education applications more competitive and can assist with decisions about your course/career choice. Client Services staff can also offer advice and support. If they cannot directly assist, suggestions can be made about referral to other staff or appropriate agencies which may be able to help if you are experiencing personal problems or difficulties with your study. Appointments with Client Services staff may be arranged at a Customer Service Centre or by phoning 9267 7500.

Unit Fees

The tuition fee for international students is: $1 525 per unit

The tuition fee for domestic students is: $1 200 per unit

These fees are valid for Semester 1 and Semester 2, 2011

Fees are reviewed on an annual basis

Current fees and charges schedule is available on the Polytechnic West website.

UNIT SYNOPSES
INTRODUCTORY STUDIES IN HOSPITALITY AND TOURISM (64371)

This unit examines today’s travel and tourism industry from a global perspective, with specific insights into the economic, political and social forces that drive and shape it. It also looks at the tourism product and its markets. The unit also focuses on the economic impact, socio-cultural, environmental impacts of tourism and the development of sustainable tourism.

The unit takes a systematic approach to the study of tourism and its links to the hospitality industry. It covers tourist types and behaviour, the role of places in tourists’ itineraries and their experience, environmental impacts, sustainability and eco-tourism, cultural impacts and authenticity, the impacts of events, and the structure of tourism industries.

HUMAN BEHAVIOUR IN THE HOSPITALITY INDUSTRY (64732)

This unit looks at analyzing the behavior of people at work in the Hospitality Industry. It will recognise the importance of effective management of people in the work situation, and evaluate personnel policies and procedures related to the hospitality industry. The unit will also identify the nature of the hospitality industry, staffing characteristics, interrelationships and behaviors of people.

ROOMS DIVISION MANAGEMENT (64388)

This unit is designed to familiarize students with management of the accommodation sector of the hospitality industry. The principles and procedures in the provision of quality tourist accommodation are studied with emphasis on front office, housekeeping, concierge and security & safety. The unit has a managerial focus, and will look at how to manage properties efficiently, effectively and profitably.

The unit will also provide an overview of the legal responsibilities of managers and the impact of new technologies on the industry. Students will be introduced to Fidelio, a current Front Office computerized property management system (PMS), in a practical environment, to enhance their understanding of the course concepts.

LEGAL ENVIRONMENT (64374)

This unit looks at the legal system in terms of civil liability, contract law and workplace environmental law. It provides the skills and knowledge to manage employment law and industrial relations, health, safety and security issues within a tourism or hospitality context. The aim of most legal systems is to provide a means of resolving conflicts in a fair and harmonious way. All legal systems are strongly influenced by the major forces that shape the society in which they operate.

HOTEL AND RESTAURANT INFORMATION SYSTEMS (64375)

This unit is designed to familiarize students with systems which are used in the hotel and restaurant industry. Information systems and the increasing application of technology to the hotel and restaurant industries will be analyzed from a conceptual and theoretical perspective. The unit has a managerial focus, and will look at the human issues of using information systems in the hospitality industry. In particular, the unit will provide an overview of the impacts of technology on the managers, workforce and customers of the industry.

Students will encounter a range of theoretical and practical applications of information technology, which are unique to these industries including reservations systems, guest history systems, electronic point of sale systems, and guest driven applications such as automatic check-in and automatic checkout

INTRODUCTION TO MANAGEMENT (64376)

This unit looks at the rapid and unpredictable change characteristics today’s work and social environments. What might have worked yesterday is unlikely to work in today’s vastly different environment. We can no longer structure organizations and mange people as we did ‘yesterday’.

Today’s managers must have broad management skills and styles, which they will continually adapt and develop. Pressure is on the manager to increase productivity and lead in a more participative, consultative way. Technological advances will proceed in leaps and bounds. Work patterns will continue to change dramatically. Our economy will be volatile until it adjusts and gives way to a global economy.

INTRODUCTION TO ACCOUNTING (64377)

This is an introductory unit and the focus is on the definitions, concepts, principles and theories necessary to develop a clear understanding of accounting statements, their uses and their limitations.

The unit concentrates on the needs of users of financial statements; and includes parties external to the organisation (for example, investors, employees, government, shareholders and the general public) and internal users (for example, management).

FOOD AND BEVERAGE MANAGEMENT (64378)

This unit is designed to familiarize students with management of the food and beverage sector of the hospitality industry.This unit will provide the students with knowledge of functions and responsibilities of a food and beverage manager and activities of the all food and beverage outlets. The unit also looks at how to manage the food and beverage department efficiently, effectively and profitably.

PRINCIPLES OF COMMERCIAL LAW (H2045)

This unit introduces students to the Australian legal system, its operation and development, and to the principles of law applicable to core areas of business, such as contract law, tort law and agency law.

CONSUMER BEHAVIOUR AND SERVICES MARKETING (64380)

This unit deals with the skills and knowledge required by marketers to understand consumer behavior and then use the information in demonstrating effective services marketing. Factors that have contributed to the development of consumer behavior and services marketing include the fast pace of new product introduction, shorter product cycles, the high rate of new product failures and the increased interest in consumer protection by private groups and public decision makers and concern over the environment. Consumer behavior and services marketing have become an integral part of strategic market planning.

This unit also aims to provide an understanding of the theory and practices in the development and execution of service marketing strategies (both consumer and business-to-business services).

MANAGING PHYSICAL ASSETS (64381)
The unit highlights the fact that facilities play a major role in the hospitality industry and guest satisfaction. They can provide an appealing visual environment that contributes to the overall ambiance, experience and comfort of the guest.
The unit also serves to provide the awareness and knowledge to make appropriate decisions in managing the maintenance in a hospitality building. Properly managed systems from design to operations can result in considerable long-term savings or on the contrary, the failure to manage such systems can result in significant long term costs.
ORGANISATIONAL THEORY AND BEHAVIOUR (H2044)

This unit provides a basic understanding of individual and group behaviour in organisations, as well as exploring some organisational theories and management processes. Topics include: individual dimensions of behaviour — personality, perception and learning, communication and motivation; groups and interpersonal influence — structure, values, interaction and leadership; and organisational issues such as structure, processes, design, decision making; organisational change and development. Globalisation and sustainability are embedded into this unit as recurring themes.

HOSPITALITY AND TOURISM MANAGEMENT (64383)

This unit examines today’s hospitality and tourism industry with specific insights into the economic, political and social forces that drive and shape it. The scope of the hospitality industry comprise of businesses that provide services and facilities such as accommodation, food, beverages, entertainment, gaming and related products.

The hospitality industry is a sector of the broader tourism industry. Tourism is an essential ingredient to the economic well-being of many regions in Australia. Demand for product and services have become increasingly price sensitive and environmentally friendly. As such, this unit deals with the skills and knowledge required to develop and monitor a business plan.

EVENTS MANAGEMENT (64384)

This unit looks at the responsibility of better defining event objectives, site selection, developing timelines, budgets, and all logistical details. These details include but are not limited to registration and hospitality, food & beverage, meetings and keynote speakers, ground transportation, activities, VIPs, accommodation and billing.

PRINCIPLES OF FINANCE AND BANKING (H2043)

This unit exposes students to the application of financial mathematics to various personal financial decisions including valuing debt, equity, and hybrid securities. In the process, characteristics of these securities are detailed and valuation incorporating the respective security’s cash flows, time value of money and the associated risk are presented.

The unit also addresses the principles of maximising shareholder wealth and firm value. The interplay between these principles is examined by consideration of information asymmetry between the different stakeholders

HUMAN RESOURCE AND ORGANISATIONAL DEVELOPMENT (H2046)

This unit aims to explore the choices organisations have for assisting employees to work effectively and adapt to change. The unit introduces the role of human resource management (HRM) to organisation development. Individual, team, HRM and strategic concepts are linked to the strategies and processes organisations and individuals use to proactively promote organisational citizenship throughout change.

Madrid – The City That Never Sleeps!

Hola! (Hello in Spanish)

Madrid, a city located in the middle of the Castilian plateau is the capital city of Spain. Madrid is called the London of Spain and is known for its 18^th century architectural monuments and palaces and also for its home football team. At Madrid, you can stroll around its streets, visit its palaces during the day, watch a flamenco show, drink sangria and make it your perfect holiday. Madrid holidays can go on till sunrise with nightlife going on till almost 6am.

Best Season to Visit Madrid

Weather in Madrid can be unpredictable with extreme temperatures but Madrid has dry weather for the majority of the year. The best months to visit Madrid are the summer months from April to June and the autumn months from September to October. During winter, Madrid gets snow for only a few days.

Highlights (Special things to do in Madrid)

Visit the amazing Plaza Mayor Square, the main landmark of Madrid for the actual Madrid experience.
Enjoy the city’s aerial view of the massive palaces and gardens on a cable car ride.
Try the Chocolate Con Churros (Spanish donuts) which is a specialty in Madrid given with a cup of chocolate sauce.
Indulge yourself with a carafe of Sangria and enjoy a romantic dinner with your loved one at Las Tablas at the Plaza Espana.
Try the delicious traditional Spanish tapas, spicy beef tripe and chickpea stew with meat and vegetables.
Watch a Flamenco show and learn a few dance steps. This is one of the top things to do in Madrid.
Visit a nightclub to feel the music and experience the nightlife energy of Madrid.
Do not miss the bull fight at Las Ventas Bullring if you visit Madrid during May. This is the season for bull fighting festival called San Isidro.
Enjoy the Spanish culture watching films, dance, music and theatre performances at the Circulo de Bellas Artes.
Enjoy the streets of Madrid filled with music and festivities during the La Paloma festival.
Visit Madrid’s art museum Museo El Prado (Prado Museum) which is the home of the best European painters including the famous Velazquez.
Walk into the football field and dressing room of Real Madrid’s stadium Santiago Bernabeu.

Hotspots of Madrid

Plaza Mayor Square (originally called Plaza del Arrabal): This is a huge traditional Spanish architectural square located at the center of Madrid. It has cafes and traditional Spanish restaurants and stores. It is the location for bullfights, celebrations, soccer games and markets.
Royal Palace: This is the official residence of the Spanish Royal family. The entrance to the palace is through the vast beautiful Plaza de la Armeria.
Buen Retiro Park (Park of the Pleasant Retreat and also known as Retiro Park): This is a must visit park with beautiful landscapes and lots of activities round the year. The park has puppet shows and other performances and free concerts. You can also enjoy a boat ride or a ride on the horse drawn carriage for a fairy tale holiday.
Golden Triangle: This consists of the Prado, Thyssen-Bornemisza and Museo Nacional Centro de Arte Reina Sofia museums; the three art galleries are located within a short distance from each other and hence the name.
Royal Theatre: Known as Teatro Real, this is Madrid’s Opera House. It has rich interiors that adds effect to the performances.
Plaza de Cibeles: Cibeles Palace (Palace of Communication) has a stunning look and cannot be missed from anywhere in the city. The surroundings of the palace take you back to the 18^th century.
Templo de Debod: Originally built on the Nile Valley in Egypt, it was brought to Spain via ship and then train and then reconstructed in Madrid. There is a museum inside which displays paintings and pictures telling the story of the temple.
Nightlife in Madrid: Break a leg to Spanish music after midnight at the various nightclubs like Ole Lola, Joy Madrid, Marula Cafe, Liquid or Soul Station. The clubs have traditional tasty Spanish tapas and other traditional Spanish snacks and music from evening till the next early morning.

Shopping in Madrid

Visit the Sunday flea market at El Rastro with street music and performances, a must visit place in Madrid. Be careful in this area as it is known for pickpockets. Fuencarral Market (Mercado de Fuencarral) that is open till midnight has lots of shopping and loads of cafes, exhibitions and cinemas. Retail shopping with international brands is found in Salamanca and Goya Street. Plaza Mayor has Calle Toledo and El Mercado de San Miguel (San Miguel Plaza) if you want to shop for traditional Spanish products like leather and jute goods. Calle Ortega y Gasset and Jorge Juan St are the places for high end shopping and designer products. If you want to shop designer products at almost half the price then visit Las Rozas Village Chic Outlet at Las Rozas. Plaza de Espana in Madrid’s city center and Salamanca have huge shopping malls with a wide range of retail outlets and eateries.

How to reach Madrid

By Air – Adolfo Suarez Madrid-Barajas Airport or the Barajas Airport is the home of Iberia Airlines and is one of the largest airports in Europe. The airport has direct flights to all major cities in the world. The local transportation modes are available throughout the day and night with buses, trains, metros, taxis and 24 hours shuttles making it easy for tourists to arrive into the city at any time.

By Train – Chamartin and Atocha are the two train stations on Madrid that are well connected with the other areas in the city as well as cities outside Spain.

By Road – You can rent a car from the several car rental companies including Hertz, Europcar, Avis, Budget and others which have their offices at the airport, bus and train stations. Ensure to check the route much prior to any turns as GPS signal may not be available if you drive through the underground tunnels.

By Bus – There are 8 bus stations connecting cities within Spain and outside. The main bus station is the Estacion Sur de Autobuses where you can purchase tickets for all bus services even if they depart from a different bus station. Avenida de America bus terminal would be the place if you are travelling to/from Barcelona.

How to get around in Madrid

Madrid’s Metro network system is the second best in Europe after London. Metro is the most efficient way to move around the city. A single ticket will cost you between 1.5 and 2 Euros for 5 stations and the travel pass for unlimited travel within a day will cost you 8 Euros. The sign boards are in English and Spanish but the announcements are only in Spanish.

By Tram – Madrid has the Metro Ligero de Madrid network which connects 38 stations with 3 lines which makes it convenient to travel to any area within the city.

Cycles are recommended only to explore the narrow streets of Madrid or to cycle on the cycle paths available near the river side and parks. You can rent the regular cycle or an electric cycle from the cycle renting places which also offer guided tours.

Buses in Madrid cover the areas which are not covered by the metro. They offer free Wi-Fi facilities on their buses. There are night buses that are available almost every 20 minutes.

The local train called Cercanies has good connectivity between the city center and suburban areas and also some local villages. You will not have to take the train for most Madrid attractions.

Taxis are easily available anywhere within the city. Watch out for the taxi drivers driving through a longer route and crowded areas to increase the fare. Driving a car within the city can be cumbersome with traffic jams, narrow streets and limited parking space. Renting a car is not a good idea to travel within Madrid; it would be a good idea if you are traveling outside the city.

Top areas in Madrid

Madrid Centre – Located at the center of Madrid, this is the area to stay in if you are a tourist as it has the maximum number of hotels and most landmarks and monuments are located close by. The Hop-On Hop- Off buses also pass through this area making it a convenient location for a Madrid tour.

Barrio de las Letras (District of Letters) – You can see the Spanish culture in this area with squares, museums (few minutes to Prado Museum) and sidewalk cafes. The streets of Barrio de las Letras have inscriptions from famous Spanish writers.

Salamanca – This is considered as the area for the elite with high end houses and highly valued real estate. You can shop for high end designer products at Goya Street in Salamanca. The area has a lot of fine dining restaurants and classy pubs.

Malasana – This area is popular for its shopping and eateries and is an upcoming area. Malasana is similar to the Camden area in London where you can walk around on a Sunday afternoon visiting unique shops and sidewalk cafes with the local traditional Spanish snacks and coffee.

Chueca – Located very close to the city center, it is known for its Europride procession (march for the gay community) and lively and colorful neighborhood with unique stores, outdoor cafes and pubs. The most known Fuencarral market is at Cheuca.

Moncloa-Aravaca – Also known as Moncloa, it is located close to the city center and is popular for its residential properties.

Bajaras – The area with Madrid’s airport has a lot of budget hotels for tourists just outside the city. Fortress Castillo San Felipe de Bajaras (World Heritage Site), located on Hill San Lazaro is located in the vicinity.

Lavapies – This is one of the areas in Madrid where you will find restaurants and stores which are not traditional Spanish due to the large immigrant population living in this area.

San Blas – This is the old town of Madrid with narrow streets and old buildings.

Tetuan – This is not an area to stay at unless you want a long holiday with budget accommodation.

Gracias! (Thank You in Spanish)

In terms of the case, it suggests that the environment of airline companies is not very stable, especially the increasing price of fuel which is the key driver of change. From Ryanair profit statement (Exhibit 1a) it shows the fuel and oil cost has increased by ˆ200 million from 2005 to 2006. The increase in fuel costs is 74 percent. The impact to the airlines companies is obvious and the budget airlines may face the trouble more so than normal airlines. Moreover, airline companies also have to concentrate on some other issues. For example, according to the case, they are facing the risks from terrorist attacks which are difficult to predict.

It is not difficult to find the changeability, however it is complex to the airline environment. Some factors, such as legal action and customer demand, also have influence on them. Some of these such as the price of fuel and oil can be predicted, while some of them cannot.

Stage 2 – Audit environmental influences

The Pestel Analysis is employed to identify macro-environment influences of the airline industry.

Political: Government wants to strengthen the economy and, consequently, will support local airlines by setting rules, such as preferential rights. Every government however, will probably do so. Therefore there’s no obvious advantage between competitions. The political issues have a wide range of effect, so they are not the key points that budget airlines are facing.

Economic: This is identified as the most crucial factor to airline companies, especially to budget airlines. The influences refer to the macro-economic factors such as the national growth rates and the exchange rates. As budget airlines, they will pay more attention to the operation costs such as fuel cost. It became a big issue for budget airlines because of the increasing cost of fuel. That may reduce the advantages and the companies will be less competitive than before. On the other hand, the recession will lead more people to choose budget airlines.

Social: With the development of Asian countries in particular China, there are more and more people deciding to study or travel in Europe. In recent years, the lifestyle of local people has also changed. They tend to travel abroad to enjoy their lives. Most of these people are not wealthy such as student. The budget airlines therefore, will be their best choice to reduce the travel costs.

Technological: The innovation of technology helps the airline companies reduce costs and carry out tasks more effectively. The new type of aircraft can help to reduce the burning of fuel; and new technology can also make the security check more efficient and accurate.

Environmental: European countries pay more attention on environmental issues, especially greenhouse gases from carbon emissions. Moreover in terms of the case, airline companies have to pay the environmental taxes for the contributions they make to global warming. In particular, it is bad news for budget airlines. Costs will increase and the companies want to maintain good brand image in the consumer’s perception. Furthermore, noise pollution and energy consumption cannot be ignored under such conditions.

Legal: Some legal actions such as preferential airport rights are directed against the specific airlines. As budget airlines, which have higher competitive power, they should pay more attention to the legal forces to prevent loss. On the contrary, they can also take the initiative over illegal aid to rivals.

Stage 3 – Determine industry specific factors (this stage will be analysed in Question 2)

Stage 4 – Identify competitive position (this stage will be analysed in Question 3)

Stage 5 – Identify key opportunities and threats

There are many potential opportunities for the airline companies. For instance, the recession may lead to more people choosing the budget airline rather than the expensive ones; new technology which helps to reduce the usage of fuel; government set the tax at a lower percentage.

On the other hand, the increasing cost of fuel may be the most significant issue most budget airlines face. What’s more, the compensation to passengers, terrorism and security, and customers’ satisfactions will all have potential negative impacts on the airline. In order to achieve lower costs, budget airlines will have to reduce costs from many departments and operations. That’s why lots of customers are not satisfied with the budget airlines except for the price.

Question 2

Prepare a Porter Five Forces analysis of the budget airline industry. Express Ryanair’s perspective of these forces.

The threat of entry

There are high barriers to enter the budget airline industry. i) High investment requirements. Economies of scale are important in the airline industry. It is difficult for new entrants to match others existing competitors. In addition to this, the operational experiences cannot be acquired in such short space of time. ii) Expected retaliation. Retaliation will take place when new entrants appear for budget airlines, it will probably be in the form of a price war due to costs of entry being very high for them. iii) Legislation or Government action. Government won’t let new entrants enter the market if the industry is saturated.

With regards to Ryanair in the budget airline industry, there will not be large impacts to existing budget airlines if new entrants appeared. Budget airlines always focus on the costs and price, so does Ryanair. According to the case, Ryanair was the first budget airline in Europe and now its ticket prices are much lower than the other rivals’. Therefore it will be impossible for new entrants to set a low price to win the market.

The threat of substitutes

Before discussing the threats, some comparative data is showed below.

Round Trip by Ryanair Flight:

London Stansted – Milan

Going Out

Regular Fare

Adult

8.99 GBP

Tue, 2 Dec 08

Flight FR 4184

8:15 Depart

11:15 Arrive

Coming Back

Regular Fare

Adult

12.99 GBP

Sun, 8 Dec 08

Flight FR 4185

6:45 Depart

7:50 Arrive

(Source: Ryanair.com)

One way by Rail Europe:

London (ST Pancras) – Milan

Standard Class

Adult

227 GBP

Tue, 2 Dec 08

8:40 Depart

21:20 Arrive

(Source: Raileurope.co.uk)

Most of the travellers will prefer the short journey, in addition to the cheaper way to travel. From the tables it is obvious that taking a plane from Ryanair is much cheaper than taking the train in a similar situation. Although some airlines may be expensive, budget airlines such as Ryanair will usually be the best choice. The impact of substitutes, therefore, has less impact on the budget airlines.

The power of buyers

Buyers of airlines tickets can sometimes be the travel agency. In other cases, Ryanair caters to ultimate consumers. Majority of the buyers are not concentrated buyers and they come from all over the countries. Individuals can select the budget airlines according to their preference, because the switching costs are low and the differentiation of such service is weak. It is extremely expensive for people to own an aircraft. When there is a choice of budget airlines to use, with low prices. So there is a low buyer competition threat. Like Ryanair, with less concentrated buyers and buyers’ competition threat, the power of buyers is low.

The power of suppliers

The high power of suppliers may be one of the most significant threats among the budget airline industry. The increasing price of fuel, which leads to a high cost for airlines, is a basic issue they are facing. As we know, fuel industry is now concentrated in the hands of few producers. Therefore, in this situation it is difficult to cut the price for this essential material. In addition to this, it is useless to change fuel suppliers when the global price is growing. Moreover there are no practical substitutes. Ryanair is facing this problem with other budget airlines.

Furthermore Ryanair sells all the ticket directly through the website. Thus there is no intermediary.

Competitive rivalry

Rivalry is influenced by these four competitive forces and each of them may have different levels of impact on the competitive rivalry.

In this market, every airline provides the same services which are poorly differentiated. Low differentiation and switching costs in this industry, therefore, cause the price competition. Ryanair, which has the first mover advantages, still holds the dominant position. Although many of the competitors were losing money or even have been taken over, Ryanair remains steady in incremental growth.

For industry growth rate, this industry is in the maturity situation of life cycle, which means the growth is low. Price war is therefore playing a crucial role throughout the competition.

Question 3

Evaluate Ryanair’s particular strengths and weaknesses and explain, with reasons, what Ryanair must do to retain a sustainable competitive advantage.

As the first-mover of budget airline industry, Ryanair still holds the dominant lowest-cost position. This is also the one of the strengths it has. What’s more, Ryanair was announced being the most profitable airline in the world according to the case. The revenue is still increasing, despite the price of fuel did not stop growing in recent years. The brand image of Ryanair is also one of its strengths. Customers are attracted by the lower price. Its traffic is the highest among the competitors (see Exhibit 2) and it is still increasing due to the enlargement of the company.

On the other hand, there are still some weaknesses of this budget airline leader. In terms of the case, Ryanair win the market mostly depends on the costs. However, the costs of its major raw materials are increasing rapidly these years. This will be a serious issue. Further, minimize costs largely will cause the lack of service and training quality and so on. The Skytrax star rating (See Exhibit 2) indicates Ryanair is below the average level. Besides, competitors contribute big influence to Ryanair. For example, Easyjet which is a young upstart of the European budget airline industry grows quickly with a large number of market shares.

It is obvious Ryanair makes success base on its price advantage, and how to sustain this advantage become very crucial issue in recent situation.

Keep first mover advantages. Long history with experiences, well-known brand image and economy of scale, these are the unique resources of first mover advantages. It is difficult for competitors to get these resources at a similar level. Therefore, in order to prevent the competitors from copying the same strategy as cost reduction, Ryanair must make good use of these unique resources and try to dominate the market.

Technology. Purchase and introduce the latest technological support. Although the fixed costs will be high, they can help the airline carry out tasks more efficiently and effectively such a new security check machine. Moreover it can also help to reduce the variable costs. For example, according to the case, new type aircraft produced 50 percent less emissions, 45 percent less fuel burn and 45 percent lower noise emissions per seat. They help Ryanair reduce the fuel cost with a lower pollution to environment.

Unique cost structure. A cost structure which aims to minimize the costs must be set up. In particular to fuel cost, the fluctuations are subject to unpredictable and volatile world events according to the case. It is important for Ryanair hedge the risks before the price goes up suddenly. On the other hand, choosing the secondary and regional airport destinations is a good way of the structure. Moreover, the internet is used to reduce distribution costs.

Service quality / Customers’ satisfaction. Customers will normally associate low price with low service benefits. Ryanair was voted the world’s least favourite airline due to its bad service such as unfriendly staff and poor legroom. However it still won a great number of customer base on the price. Thus if some competitors cut down the ticket price to a low level, Ryanair will get into a big trouble due to the similar prices but lower service quality. Therefore it must not only focus on the price but also the service. In order to gain competitive power, for example, brand loyalty can be one of the aspects.

Government / legal actions. Ryanair should take care of the government and legal actions and moreover, can take the initiative over illegal aid to rivals. These may prevent the unnecessary loss.

In summary, Ryanair, as the cost leader in budget airline industry should not only focus on the costs but also lots of other issues. Although it is developing rapidly and successfully, the future is unknown. The uncertain environment is changing all the time, thus Ryanair should always follow it and make the long-term plans in order to retain a sustainable competitive advantage. Grasp the opportunities, and it will has a bright future.

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