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Introduction:

Pakistan is a multilingual country with more than sixty languages being spoken. English is the official language of Pakistan and used in official business, government, and legal contracts, ] while Urdu is the national language.

Pakistan is a good place for tourism as it has the most appealing and breathtaking views of mountains, plateaus and deserts. It has the high potential to attract a large number of foreign tourists, along with that, Pakistan Tourism Development Corporation (PTDC) had set up 27 motels and 3 restaurants for the convienience of these foreign tourists, PTDC need to intensify their marketing ability in order to attract tourists from countries like, China, Middle East Korea, Japan, and many other countries. Moreover Pakistan government need to take certain actions, in order to promote and acknowledge Tourism in Pakistan, as doing so will not only benefit us financially but will also bring unity, compatibility and harmony among nations. Moreover government also need to encourage private sector to develop tourism-friendly environment which will result in financial stability.

Source: PTDC page on mountaineering, http://www.tourism.gov.pk/mountain.html

Research methodology:

Most of the data obtained for this research will come secondary sources including book, internet, magazine etc but to increase the accuracy of information I will conduct primary research to validate my results from secondary data .

Primary research for this assignment was conducted through a telephonic interview with people who are influence by the tourists. I have taken a sample size of 30 people who belong to different places but have one thing in common and that is they have interest in tourism in Pakistan.

The sample selected [people who are either potential customer for tourism in Pakistan ir those who belong to promote tourism in Pakistan together with those who earn their living by providing service to foreign tourist.

Following are the few questions which I have ask to these people in order to gather the data for my research.

How are conditions in Pakistan for foreign tourists

Do Pakistan has got enough place for foreign tourist to visit.

How is security situation across the country

What place would you suggest to foreign tourist to visit

Do government of Pakistan taking enough steps to promote tourism

Do people of Pakistan welcome tourist in their country

In response to first question 70% of people interviewed responded that conditions in Pakistan are good enough to tourist. The condition include security situation but also include infrastructure road network and other conditions while the raining 30% were quall divide for example 15% said conational Pakistan are not favourable for foreign tourist while remaining 15% said they were not really sure.

Out of the total sample I have selected 90% people do believe that Pakistan has enough place for many tourist to see and therefore had the other issue such security etc resolve Pakistan has much to offer foreign tourist while 10% people were not sure if Pakistan had enough place to offer to foreign tourist.

In response to question of security conditions most people who were outside the Pakistan believe that Pakistan is not very secure country for foreign tourist and that accounted for the 80% of them while remaining 20% whom majority were Pakistanis in United Kingdom believe that Pakistan is though affected by terrorism and other issue but still security conditions in the country are satisfactory enough for the foreign tourist. While remaining people who were inside the country and when whether foreign tourist should Pakistan without risking their security have replied positively.

When I ask on few places that people know should be interesting for tourist many people replied by pointing out historical place such Taxila, Mohn Jo daro to sea beeches of Karachi and beautiful natural place in Gilgit-Bilistan. But sadly people who were outside the Pakistan were not really sure the famous places to visit in Pakistan.

In response to the question of whether government of Pakistan is promoting tourism in Pakistan whether it’s domestic tourism or foreign. Almost 70% of people said that government of Pakistan should do more and is not doing enough to promote positive image of the country. While remaining 30% were not sure about the government action to promote tourism.

When I ask the question whether Pakistani people welcome tourist almost 90% agree that Pakistani people do welcome tourist either they are coming from other part of the country or from the other of the world.

Tourism in Pakistan

Due to its diverse culture, people and landscape, Tourism is growing industry in Pakistan, even after considered as one of the most dangerous country in the world, According to British Magazine “The Economist”. In Pakistan there are number of varieties of attraction that ranges from the ruins of ancient civilization such as Mohenjo-Daro, Harappa and Taxila, to the Himalayan hill-stations that attract those interested in field and winter sports. Moreover, Pakistan has several mountain peaks of height over 8,000 metres (26,250 ft), that attract adventurers and mountaineers from around the world, especially to K2. Many domestic and International tourists visit these areas most often in the month starting from April to September. Tourism has become the source of income for local people.

In 2009, Pakistan was ranked 113 out of 130 countries to visit, According to the World Economic Forum’s Travel and Tourism Competitiveness Report (TTCR). Although due to Political instability, suicide attacks, religious conflict, kidnapping of foreigner and uncertainty in the country had badly affected the Tourism throughout the country, especially NWFP, which is currently renamed as Pakhtoonkhwa.

Source:

Eco tourism:

For decades, Ecotourism has become the significant part of the tourism business in Pakistan, as it has offered much tremendous experience along with the stunning mountains of NWFP, attracting number of tourists all over the world for hiking, skating, forest camping, climbing, and exploring the region’s natural parks and forests. Pakistan ecotourism destination is unforgettable for those who have ever visited it.

http://whc.unesco.org/en/statesparties/pk

Especially, Swat, Huns, Aruba, Abbott bad, Murfree, Narran and Kahn have yet been known as the ideal tourists spot for both summer and winter season. The snow-peaked mountains, the natural parks and the wildlife in the forests offered a thrilling experience especially for the one who is in search of adventure.

The natural beauty of this mountainous scenery has attracted number of tourists generating vital jobs for local people in the hospitality-related businesses. Moreover the Swat valley alone – known as the “Switzerland of the East” – has become the centre for 800 hotels. Over 40,000 local people Pakistan employed directly in hospitality.

http://whc.unesco.org/en/statesparties/pk

Impact of war on tourism in Pakistan:

Over the past decade, and especially since 2007, the rapid spread of terrorism have not only created uncertainty in the country but also crushed the major sector of economy that causes unemployment, Suicide bombing has become common in everywhere likewise, in shops, markets, public places, business centres and institutes. War and conflict is not limited to a particular city. Its effect is everywhere, anybody can be victim of it.

Due to fight between military and religious forces, the NWFP- which is considered 70% of the country’s tourists site, and where millions of people involved in the tourism industry are badly beaten. Continuous war and terror has weaken both the economy and defence of the area.

http://www.carnegieendowment.org/files/tellis_pakistan_final.pdf

Due to worst security situation and many of the popular location are converted into war zones, hardly few travellers now visit Pakistan. Although after 9/11 attack in USA, there was a slow decline of tourists in Pakistan but the recent military operations and suicide attacks have been the last nail in the smashing of tourism industry.

Since the initiation of the major religious and military offensive, the earning that comes from tourism has been declining dramatically. From Rs 16 billion in 2007, revenues halved in 2008, with a further major fall in 2009. The industry is now facing a $50 million annual loss as a result of the military operations.

The hospitality business had experienced a major fall of 40% in room occupancy countrywide. Moreover in NWFP, the insurgency has caused the shutdown of tourist industry. From the last three years the hotels have been closed while the industry has lost of Rs 600 billion. Moreover the transport industry is also going through tough times. Due to huge job losses in tourism and other related industry, majority of the people have migrated to other cities in the search of employment.

Moreover the revenue that was generated from tourism has been declined by 11.8% in 2008, while 12% in 2009. The average family involved in tourism business used to earn around 40,000 per mouth and soon after war their earning has dropped to 5000/ month.

With more than 25,000 people killed and more than a million displaced in the past year, planned hotel projects have been put on hold. The number of mountain climbers and foreign trekkers has reached zero. Barbarism and bloodshed now run rampant in places which once offered peace and tranquillity. No-one would dream of visiting these places for pleasure now.

http://www.carnegieendowment.org/files/tellis_pakistan_final.pdf

Moreover adding to the crises faced by these shattered tourism industry, the federal budget has also been cut by 36 percent for 2010-2011 comparatively with the previous year. The only project this year will be to reconstruction and renovation of existing buildings. There isn’t any scheme introduced in order to help overcome terrorism.

With the Pakistani political leadership appears to unaware of the real potential of industry, that show little or no prospect in the coming years of tourism attaining momentum that it lost. With the whole industry standing on the boundary of collapse the future looks blank for Pakistan most spectacularly beautiful locations.

http://www.carnegieendowment.org/files/tellis_pakistan_final.pdf

Pakistan strategy to control extremism:

In the eighth year of the global war on terror, the international community has realized that it is a war of ideas that cannot be won through force. Eventually Pakistan sees that countries today have adopted unique approaches towards deradicalization according to the requirements of their cultural, political situation, and social specification. The aim of these practicing deradicalization programmes in Middle East and South East Asia, at a collective level, is to change the worldview of the affected persons. Private sectors or at some places government and private sectors together adopted the approach of ‘rehabilitation and re-education of the detainees’.

The reason behind the failing of war on terror on both sides of Pak-Afghan border has also some structural causes such as refusal of Taliban from Afghan government, public perception of Pakistan’s policies as a key US ally, use of force as a priority option, continued US drone attacks, denial of any relief and transitional justice to the victims of military operation, issue of Afghan refugees, and lack of trust between US, Pakistan and Afghanistan.

There is a strong tie between lack of human security and terrorism. Rise in extremism can lead to human insecurity and vice versa. Since independence, government of particular south Asian states have not been providing their people with minimum security. Governments and ruling classes, instead of focusing on dealing with the issues of human survival and development, embarked upon perpetuating their poPakistanr and influence. Subsequently, no South Asian country has been able to free itself from discriminatory and exploitative policies, which led to increased insecurity and to the rising number of communal and terrorist outfits. Even after the problem these outfits have made, no serious action has been taken by the government or civil society in order to diminish rise in extremist trend at the initial stage. All of the regional states are facing the menace of extremism and terrorism in one or other form.

http://www.rferl.org/content/Analyst_Defeating_Extremism_In_Pakistan_Requires_Regional_Strategy/1368724.html

Currently south Asian region are facing serious security threat which is due to increment of terrorism and extremism. There are various factors that have led towards this situation.

The politics of violence and extremism in South Asia is mainly the result of faulty national policies and interference of external powers. The region’s vast potential is hostage to unresolved inter-state and intra-state conflicts. In most of the states, the governments (either democratic or military) have failed in providing good governance and solving social problems such as unemployment, social injustice, and poverty. The political culture in these states was unable to meet the imperatives of globalization. In addition, instead of promoting unity and integration (both at national and regional levels) it led to ethnic solidarities and identification with religion and culture.

Source : http://www.cssforum.com.pk/general/news-articles/articles/26177-causes-extremism-south-asia-pakistan.html

How tourism situation could improve in Pakistan

The tourism sector is being overlooked by the successive governments and quite tiny amount is allocated in Public Sector Development Programme that hardly caters for it demands. At global level, Pakistan is wrongly projected in the media and tourists are advised not to visit this south Asian country, which offer four-season tourism opportunities.

Security is just not only the issue that has haunt the terrorism but there are also some other factors involved which add to woes of this multibillion dollar trade the world over. These factors involve like,

Moreover, Lack of infrastructure, facilities to the tourists, transport, discouraging response from officials circles etc are also some of the areas that are need to be improved.`

Until and unless take this (tourism) industry on priority basis, Pakistan are not going to see it flourishing. Pakistan also needs to put in maximum resource in our tourism sector.

Pakistan has very diverse and rich culture to offer tourist together with lots of opportunity for adventure tourism as the four provinces and three territories of Pakistan are very diverse and so different that it doesn’t look like to foreign tourist that they are in same country with different culture, attractions and different seasons.

Pakistan should improve the image of country by first of improving security situation in order to convince foreign tourist that they are safe in the country because in the past the incident like kidnapping of American journalist and attack on srilankan team together with bomb blast in big cities of the country lead to a feeling among the west that Pakistan is not a safe country which is main cause of declining tourism in the country especially tourist from western countries are reluctant to visit Pakistan because of the fear that country is not safe enough.

Together with these measure Pakistan need to improve its image by promoting itself on various platforms around the world and together promoting hospitality industry through giving them incentives, Pakistan can catch significant number of tourist looking for adventurism or natural beauty visit Pakistan and contribute significant revenue for the government of the country while providing employment to big number of its population.

Security situation for tourist in Pakistan:

Pakistan have got a number of places where tourist can visit and these places are safe and secure especially the southern part of Pakistan is very much safe together with northern areas like gilgit and biltistan which are very beautiful and well received by tourist that even though when war on terror going on bu the tourism in northern areas is increasing and every more and more foreign tourist are visiting these areas. The mountain there are very clean and beautiful which catch the attention tourist and that s the prime reason why many people who visited Pakistan will be able to tell you that how beautiful the place which is though not very promote but well received by people around the world.

Source: http://www.eturbonews.com/15162/diversity-adventure-story-and-false-media-news-pakistan

Every year thousands fo people from the countries such India and china are coming to see the Pakistan and they came here andseee the country hwile goi ng back they told their families and friends about the country which is not told on media.every Pakistan receive a grea t number of adventure tourist who came here because they believe that Pakistan is safe when they return with positive experience they act as advertisement for the country.

Source: http://www.eturbonews.com/15162/diversity-adventure-story-and-false-media-news-pakistan

The people of Pakistan are welcoming and they give respect to visitors and greet them, show them local custome anad tribal way of doing things which tourist find attractive and interesting.

For the adventure tourist especially Pakistan is very good place, as in Pakistan there are huge mountains like the eastern Himalaya and other, these mountain have a height of over 8000 metres and are longest chain of mountain where people can do tracking, exploration, or anything in this beautiful area.

Source: http://www.eturbonews.com/15162/diversity-adventure-story-and-false-media-news-pakistan

Pakistan is unique ! Situated in the heart of the South Asian sub-continent, it is a country with its own history and cultural heritage, fascinating in its own right. Pakistan was the site for one of the world’s earliest human settlements, the great prehistoric Indus Valley Civilization, the crucible of ancient empires, religions and cultures.

The land of Pakistan ranges from lofty mountains in the north, the Karakoram and the Himalayas, through dissected plateaus to the rich alluvial plains of the Punjab. Then follows desolate barrenness of Baluchistan and the hot, dry deserts of Sind blending into miles and miles of golden beaches of Makran coast. Come and Explore the Treasures of Pakistan with us. A visitor to Pakistan is more than a tourist – to us he is an honoured guest.

Competitive advantage of Pakistan over other countries:

In order to compete in this environment every country in the competition to catch tourist have to offer competitive advantage which is the things that country can do best. The possession of competitive advantage is in itself is not enough but countries like industries to communicate it to potential tourist in rest of the world. The basis of competitive is always lie in the resources of the country with prime important is the way that country use these resource in order to get competitive advantage and also with the fact that the resource which formed the basis of competitive advantage are of sufficient quantity and quality. The three major resources for country are financial resource, physical and human resource . While these resource of financial human and other physical are in economics refer as land, labour and capital with the basic skills entrepreneurship.

http://www.lonelyplanet.com/pakistan/images/badshahi-mosque-pakistan$24057-10

It’s a open secret that northern areas of the country are very rich for attracting the potential tourist where the natural beautify of landscape with their traditional cultural heritage have made a heaven for eco tourist especially. But sadly those northern areas of the country are not very well developed and considered by government and therefore are not very well protected and their natural beauty with their unique cultural heritage couldn’t effectively conserved by government of Pakistan till today.

Though when considering adventure tourism we think about Nepal and other countries located in the region but Pakistan has enough to offer in adventure tourism such as five out of fourteen mountain peaks of K2 are situated in the Pakistan where there height reach to as much high as 8000 meter and together with this some of the largest glaciers are situated within the territory of gilgit-bilistan as these are largest glaciers outside the polar region.

http://en.wikipedia.org/wiki/Gilgit-Baltistan

Mohenjo-Daro was a city located in the south of Modern Pakistan in the Sind Province, on the right bank of the Indus River. It was built between four and five thousand years ago, and lasted until 3,700 BP. It was part of the Harrapan Civilization, and the city had at least 35,000 residents. Mohenjo-Daro means “mound of the dead”. The city was approximately one square mile in size. In 1922-1927 large scale excavations at Mohenjo-daro Pakistanre carried out by R. D. Banarjee and continued by M. S. Vats and K. N. Dikshit under the direction of Sir John Marshall. E. J. H. MacKay carried out further excavations from 1927 to1931. Sir Mortimer Wheeler made small excavations in1950.

http://whc.unesco.org/en/statesparties/pk

In Balochistan there are many caves for cavers and tourists to visit especially the Juniper Shaft Cave, the Murghagull Gharra cave, Mughall saa cave, and Pakistan’s naturally decorated cave, the Mango her Cave. Pakistan is a member country of the Union International de Speleologie (UIS).

The northern parts of Pakistan are home to several historical fortresses, toPakistanrs and other architecture including the Huns and Chitral valleys, the latter being home to the Kalash, a small pre-Islamic Animist community.[Punjab is also the site of Alexander’s battle on the Jhelum River. The historic city of Lahore is considered Pakistan’s cultural centre and has many examples of Mughal architecture such as the Badshahi Masjid, Shalimar Gardens, Tomb of Jahangir and the Lahore Fort. The Pakistan Tourism Development Corporation (PTDC) also helps promote tourism in the country. HoPakistanver, tourism is still limited because of the lack of proper infrastructure and the worsening security situation in the country. The recent militancy in Pakistan’s scenic sites, including Swat in Khyber Parkton Kawa province, have dealt a massive blow to the tourism industry. Many of the troubles in these tourist destinations are also blamed on the frail travel network, tourism regulatory framework, and low prioritization of the tourism industry by the government, low effectiveness of marketing and a constricted tourism perception. After these areas Pakistanre being cleared off the militant groups in late 2009, the government, with financial support from the USAID, started a campaign to reintroduce tourism in Swat valley. Pakistan receives 500,000 tourists annually, with almost half of them heading to northern Pakistan

http://whc.unesco.org/en/statesparties/pk

Strategies to improve tourism in Pakistan:

1. Safety

2. Emergency evacuations

3. Easy bookings of hotels and resorts, train and air services, cabs etc.

Tourism is, in the current period, one of the areas that can provide regional and country, a profitable and economic development. Natural and anthropogenic potential which Romania has is necessary to be properly exploited, providing promotion and development of investment programs, able to attract a large number of tourists. The project is presenting a series of specific mountain tourism development through investment programs focused on strategic quality tourism services and protect the natural environment.

Airports are the gateway to the country. Facilities and handling provided at the

International airports from a lasting impression on the foreign tourist. Our airports suffer from a number of drawbacks despite the vast improvements undertaken in recent years.

Sufficient attention has not been paid to the periodic training and education of personnel involved in handling immigration, security and health checks. Personnel at the airports would be encouraged to learn at least one foreign language. Suitable financial incentive will be provided for this purpose. Facilitation counters located in the immigration area will be manned by the personal of PTDC. Accredited representatives of recognized travel agencies would be given identity cards valid up to airline and immigration counters.

Baggage handling and clearance system should be improved.

The tour operators will arrange insurance cover for the tourist groups handled by them. The existing requirement of police registration and restriction of movement of foreigners would be removed except where specifically required under security considerations. Most tourists visiting Pakistan require visas, which are issued by Pakistani Embassies or High Commissions in other countries. While implementation is satisfactory, visas are an irritant to tourism and add to the cost of a holiday. Visas for nationals from some neighbouring states include considerable restrictions, which puts significant limitations on the development of regional tourism.

However, as a part of its policy to facilitate tourism, the government has recently eased restrictions on visas.

Source : http://www.tourism.gov.pk/travel_guide.html

The Pakistan Tourism Development Corporation maintains 21 Tourist Information

Centres at various sites across the country; in addition, there are information offices

Operated by provincial tourism authorities. However, the standard of service offered invariable and a rationalization of all centres is required, with staff training in foreign languages and customer relations. High-tech Tourist Information Centres of the kind available at Karachi International Airport, with e-mail, fax, and website facilities need to be established at the other major airports and city centres.

A website of 1500 pages showing Pakistanis scenic tourist sites and cultural heritage has recently been launched which will greatly enhance awareness both nationally and internationally.

Source : http://www.tourism.gov.pk/travel_guide.html

There are approximately 41 tour operators in Pakistan that provide destination

Management services for domestic and foreign tourists. As their services are critical to the development of international tourism, they need to be treated as a primary sub-sector and supported accordingly.

Several areas of regulation impact negatively on tourism, such as the forbidden

Photography of bridges and airports, and restricted zones where trekkers require special permission to enter. These restricted areas could be limited and perhaps renamed permit zones. Tribal leaders may be involved in the development of tourism activities in their areas.

Although Pakistan possesses world-class tourist attractions, the international tourist

Potential of areas such as the Swat Valley has been considerably reduced because of the lack of planning regulations, over-development and environmental degradation. Due to lack of co-ordination between the tourism industry and authorities in charge of natural, historical or religious sites, the tourism potential of such sites is not fully realized.

Source : http://www.tourism.gov.pk/travel_guide.html

Conclusion:

It’s the only industry, which needed more and more exploration’ (Zamar Sheikh)

Pakistan is a major tourist attraction because it is blessed with natural beauty and

Historical places that can yield huge foreign exchange if properly and methodically

Exploited. Tourism could become foreign exchange earning industry for the country.

Though Pakistan, has lately taken initiative but still there is dire need of tireless efforts to exploit this sector and to add more dimensions to attract the tourists.

No proper attention was paid to harness the God gifted opportunity to earn more and

More foreign tourists and foreign exchange which would open up new vistas of

Employment in the tourism sector. Moreover the tourists may find and explore the market of their interest in Pakistan.

Involvement of private sector was important to give boost to tourism. Private sector

Should be given not only tax exemption but they also should be provided with vast

Opportunities to invest and they must be facilitated also in terms of money; a network of five stars hotels and motels should be constructed at all tourists’ spots and tourist

Operators may be provided necessary facilities, which on the one hand helped reduce unemployment while on the other harness foreign exchange.

Private sector should take initiative to develop and exploit all tourist attraction and

Historical location in the province, which unfortunately, has suffered due to negative

Concept about its law and order.

Good hotel industry acceptable to the international standards would give boost to the

Tourist industry, which has suffered because of a number of reasons and one of them, was lack of proper accommodation for local as well as foreign tourists. At present there are about 4000 to 4500 rooms available in five star hotels throughout Pakistan, which were insufficient to the demand.

There are problems n Pakistan which prevent this country from attracting its due share of international tourist and therefore to attract the tourist and to boost economy the government of Pakistan have to take serious measure to prevent threat of security to tourist together Pakistan need to promote itself as tourist destination at international forums but these both measure are equally important .

The most important aspect security concern of tourist and therefore without taking proper measures to avoid security threat of security. the government of Pakistan should be conscious and careful when people visit this country and must show them how humble and welcoming they are and how interested people in Pakistan are to greet the foreign tourist as well as local tourist alike. Pakistan has truly potential for being a hot tourist spot in region especially for adventure tourism and eco tourism its potential is not unseen but need of the hour is promote itself and to reduce the concerns tourists.

The South west airlines are part of the airline industry in U.S.A and are a low cost airline located in Dallas U.S.A.

An external analysis of the environment in the airline industry was carried out through a PEST analysis and the 5 forces of the Porter’s model and the below conclusions were reached.

Political environment-the policies that governments have come up with. For instance the UK government and environmental activists that aviation degrades the environment greatly and should therefore be controlled. A government is a very powerful entity and therefore it could pose a threat to airlines if it decided to impose regulatory practices on airlines.Limitations regarding the terms and legal obligations of the airline may make it hard for the airline.

Scanning the political environment in this case, we find that south west airlines sought to make use of the opportunity created by the airline Deregulation Act passed by the U.S congress in 1978.this law permitted interstate flights. But Southwest’s attempt to becoming an inter-state airline soon faced political obstacles. Southwest wanted to operate all its interstate flights from Love Field Airport which was very close to downtown Dallas. On the other hand, all the other airlines operated from Dallas Fort Worth Airport, which was far away from the main city. Rival airlines fearing that South west would get a larger share of passengers, tried to use their political influence to ban operation of flights from Love Field, Congressman Jim wright tried to pass this law.

Social environment. These have positively affected the industry in that with the introduction of more and more airlines, even people from the middle-class can now travel by air. Beyond that, there has also been more job creation through the establishment of these airlines. An important aspect of the social environment concerns the values consumers hold. Values mainly revolve around a number of fundamental concerns regarding time, quality, total environment, financial conditions and diversity. The ultimate taste of a business is its social relevance. When it entered the airline industry, the social environment for air passengers was discouraging, the fares were too high, flight schedules were not convenient for passengers and the time required for travelling from the city , to park and take off from the airport was lengthy and tiring. The aptitude of managers of southwest airlines is seen whereby they refuse to move their flight operations from Love Field. This was a clear indication that they were observing the social environment and building their organization against this. With this recognition of the social environment, the southwest Airlines gained popularity among the citizens and thus attracted more customers.

Economic environment. These can take several dimensions, first how the industries that airlines depend on affect airlines and how the airlines are directly affected by a country’s economy. The changes in the economy have had a tremendous effect on the airline industry. Another thing that the economy is affecting the airline industry is the competing airlines. The bigger airlines can afford lower fares which make it hard for the smaller airlines to compete. Different airlines have plans to expand but will not be able to until the cost of fuel is under control.Fuel price hauls and fluctuations are a major reason for the Southwest for not incurring more profitable operations. (Southwest counters this by strict financial spending on fuel i-e fuel-hedging) For the low carriers who allow advanced booking, they will need to work on a plan to avoid bankruptcy. This will make the airline industry continue to boost prices due to the fact that oil prices are expected to continue rising due to the supply.

Traveling by air is both elastic and inelastic depending on whom it is that is traveling. If a family is planning a trip just to take a vacation and the price of an airline ticket is extremely high, more than likely they will decide to wait on the trip until the prices are lower. This shows that the airline industry in considered elastic. However, if a businessman needs to be at a seminar across the country by the next day, he will need an airline ticket regardless of the cost. In this example, the airline industry would be considered inelastic because it is a necessity.

The current market has a big part in the supply and demand in the airline industry. For instance, with the price of oil rapidly increasing, the cost of an airline ticket is also increasing and the demand for leisure travel is decreasing.

After the bombing of the World Trade Centre on September 9th 2001, people were afraid there would be another terrorist attack involving a plane and the demand decreased. Another factor in the cost of an airline ticket is the date it is purchased. If there is an emergency and someone purchases a ticket close to the departure date, even though there are unsold seats available the cost will increase.

Technological environment. This basically means that some technological advancement has proven, and may in future prove to affect the airline industry negatively thus a decrease in the air travel demand. A good instance would be video conferencing which reduces the need for people to constantly travel. If not planned for properly, an airline could suffer greatly from ignorance to technology. Social networking sites like Facebook and Skype allow for people around the world to share information they may not have been able to before. One can chat with a relative and avoiding travelling by air throughout the world.

The 5 forces of Porter’s model

Threats of new entrants. There has been a never ending expansion of the aviation industry with new airlines coming up every day. Airline managers should therefore ensure that they are prepared and have a strategy on how to deal with new entrants into the industry. This can be clearly portrayed by the way Braniff and Texas international Airlines reacted to the entry of a new airline, Southwest Airlines, they even decided to work together in a bid to destroy the airline even before it started their operations. This would go to show that the treat of new entrants in the airline industry is very high.

Availability of substitutes. They exist because there is more than one way of doing anything. For instance when travelling, one can use vehicles, trains bicycles, airplanes, ship and so forth. Apart from alternative methods of transport, technology has gifted us with the gift to do a lot of things without moving. The ease of substitution in the airline industry is surprisingly very high the greatest contribution being from technological advancement. This has led to a drop in the demand for air travel causing airlines to constantly register losses. The ease of substitution in the Airline industry is very high since other alternatives have come up mostly due to technological developments.

Degree of rivalry among competitors. How competitive is the industry? Is there a dominant airline and many other small airlines or are there many powerful airlines how many other airlines are there in the industry. These are some of the questions that are raised under competition. If there’s one dominant airline then the degree of competition is quite low in the industry. The airline industry in the USA is very competitive and has a lot of rivalry going on. In the case of southwest airlines, its major competitors, Texas International and Braniff Airlines even joined hands in a bid to destroy the southwest airlines even before they started operations. This goes to illustrate how competitive the airline industry in USA can get, the competitors were threatened by an airline that hadn’t even started operations.

Bargaining power of suppliers. The bargaining power of suppliers is basically quite low in the industry in that, much bargaining doesn’t take place. Suppliers are mostly big shot aviation companies and can only compromise prices with airlines so that during their low period, they are able to negotiate prices with their buyers. It may not be exactly bargaining but it counts for something. And therefore the bargaining power of suppliers will be considered to be low.

Bargaining power of customers. The airline industry rarely allows room for customer bargaining, you can either afford to travel by air or not and with more and more new airlines coming up, almost all social classes are catered for. South airlines however haven’t classified their passengers which reduces discrimination. Through observing the social environment, the Airline has been able to cater for the diverse needs of the customers, this though does not count as bargaining power of the customers towards the airline. The bargaining power of customers in the airline industry is quite low compared to other industries.

Conclusion

After carrying out the PEST analysis and analysing the environment using the Porter’s Model the following conclusions were reached. There are threats and opportunities that affect the Southwest airlines

Threats

The decreasing demand for air travel

Fuel price hauls and fluctuations.

Terrorist activities make it more of a threat to travel.

Opportunities

There are still many national and international markets that are still untapped.

There are many industrial opportunities for development in the airline industry.

It can haul longer flights to cover more expansion.

It can also tap the travel business option for the business class passengers, and offer private flights.

It can get the latest technology, which would give it a further cost effective lead, as well as providing new services and products.

Internal Organizational Analysis and the competitive advantage the group may or may not have in establishing a presence in London

A schematic representation of the SWOT (Strengths, weaknesses, opportunities & threats) will be used to match the key external and internal factors. The following SWOT would provide us with a comprehensive organizational resource analysis of the Shangri La group alongside providing us with the competitive advantage the group would enjoy.

Strengths

Weaknesses

Situated at a premier location in London as has been evident in their properties throughout the world (Grayson & Hodges, 2004).

Legendary Asian Hospitality – the classic Asian Flavor – having a Chinese parent company gives them an edge over all the others in terms of having the Asian culture part of their corporate culture and thus a unique position (Hitt, Ireland & Hoskisson, 2009).

40 hotels worldwide – thus a broad base to share experiences and put learned lessons from around the world to good use (Robbins & DeCenzo, 2007).

Pre identified target segment of business and leisure travelers with an eye for class and culture (Robbins & DeCenzo, 2007).

Service approach of hospitality and flexibility embedded in corporate culture and marketing activities (Walker, Walker, Mullins & Boyd, 2010).

Sound financial backing.

First interaction with Western culture was Sydney – no other experiences as yet in the West

Marked difference in Sydney and London’s Culture

An effective and efficient management style played a major role in Shangri La Sydney’s success.

The brand is not that well recognized outside the Asian and now also Sydney’s market.

Opportunities

S-O strategies

W-O strategies

London 2012 Olympic and Paralympics Games.

New planned tourist attractions like International Dome in London.

Trend of using price promotions.

Comparatively lower value of Pound sterling

Growing emphasis of the local government on promoting tourism.

Growth of London as a financial sector – a conference and business destination.

Establish in London (S1,S2, O1,O2,O4,O5,O6,)

Extensive integrated marketing communication efforts. (W1,W4,O1,O5,O6)

Make use of opportunities in the West (W1, W5).

Threats

S-T strategies

W-T strategies

Recent trends show that luxury hotels have grown at a rapid pace in London. The competition in the near future will be cut-throat and intensive as more and more rooms will be added to the industry.

The presence of much more powerful brands in the luxury sector of the London hospitality industry

Substantial increase in branded budget hotels – around 13% last year

Uncertainty created by terrorist activities.

Aggressive investments in the sector by other Asian & Middle Eastern investors.

High barriers of entry

Niche Marketing and maintain that niche (S2,T1,T2)

Premium, Image Based pricing (S2,S5,T3,T5)

Based on the above analysis and the secondary research, Shangri La’s competitive advantage lies in its classic Asian Flavor and the ability to maintain a customer-centric approach which forms the basis of their corporate culture, thus also reducing the need for standardization of processes. The core values of the training are: respect, courtesy, sincerity, helpfulness and humility and the training modules focus on the group’s mission of “delighting customers each and every time (Honeycutt, Ford & Simintiras, 2003)”. Not confined to training programs, Shangri-La Care is a living culture within the group, strongly supported by top management and continuously cascaded through the organization.

Both these are bound to help Shangri La carve out a unique niche for itself in the London market. The only threat being the fact that other Asian and Middle Eastern players are also venturing into the hospitality industry. Whether those who are positioned based on their Asian ethnicity are able to bring out the same flavor in their culture remains to be seen!

2. An external analysis of the potential competitors and customers in London

London, that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained.

-Doyle, Sir Arthur Conan

The past 20 years has seen an overall increase in the total number of visitors to London, despite any temporary downfalls seen intermittently in the short-term. Overseas visitor numbers have increased from 9.6m in 1990 to around 14.9m (estimated) in 2006 (Hooley, Saunders, Piercy & Nicolaud, 2008). Domestic visitor numbers to London have also grown over the long-term from 6.9m in 1990 to an estimated 11.8m in 2006. Domestic numbers however have seen the largest fluctuations (compared to overseas visitors) in the short-term, resulting in a slight downward trend in total visitors to London since 2002. This has been influenced by the increasing popularity and accessibility of many countries and growing competition from other major European cities (due in part to the ascension of no-frills airlines) (Flourish & Oswald, 2006).

The overall London market has been buffeted by a number of issues since 2001, including terror events, SARS and the outbreak of Foot and Mouth. However, a recovery in demand (particularly for international visitors) is evident and the London bombings in July have proved only a temporary setback. Improved room yields have supported investment in new hotel rooms in London, increasingly away from central London to the western and eastern parts of the city. The dispersal of accommodation represents opportunities for businesses outside of Central London, but also provides challenges for coordinating visitor infrastructure including transport and information services (Easterby-Smith, Thorpe & Lowe, 2002).

There has been strong growth in the budget sector of the market and this has provided visitors to London with a greater choice of accommodation. Moves to standardize the quality ratings for hotels will hopefully also provide visitors with greater information and certainty regarding their accommodation experience. Looking forward, tourism is expected to continue to grow (as forecast to 2016 in the 2002 PwC report and extended in this report to 2026) and when considered in combination with the additional impact of the 2012 Olympic and Paralympics Games (whose influence was not included in the PwC report), and the planned development of major tourism facilities, such as the International Convention Centre, it can be seen that substantial additional demand for accommodation on an on-going basis could be generated (Young, Weiss & Stewart, 2006). New accommodation is planned to meet future demand, closing the gap between the current room stock and the demand forecast in 2016 as reported by PwC, and the hotel market is upbeat about London’s prospects.

Demographic change looking forward, tourism is expected to continue to grow (as forecast to 2016 in the 2002 PwC report and extended in this report to 2026) and when considered in combination with the additional impact of the 2012 Olympic and Paralympics Games (whose influence was not included in the PwC report), and the planned development of major tourism facilities, such as the International Convention Centre, it can be seen that substantial additional demand for accommodation on an on-going basis could be generated. is expected to provide a market opportunity for the provision of accommodation to the accessible accommodation market, although evidence suggests that London is not servicing this market as well as other destinations, which provides challenges for the future (Greater London Authority, 2006).

As one of the main tourist destinations in the world and with the 2012 Olympic Games on the horizon, London is set to be at the forefront of a recovery in the UK, and indeed European, hotel markets. Price promotions and the low value of sterling during the year allowed London to remain a popular tourist destination, with leisure tourism particular from Europe, offsetting the fall in corporate bookings, which had continued from 2008 (Smith, Berry & Pulford, 1999).

These would-be buyers have been attracted by the depreciation of the British Pound against the US Dollar and the Euro. Initial signs of a slowdown in the reduction of values, indicating that the bottom of the market has been reached also makes purchasing attractive to high net worth individuals and sovereign wealth funds. The lure of the Olympics is continuing to draw operators and developers into the capital, which is predicted to experience a 12% increase in new rooms (13,300) by 2012. With its high barriers of entry London continues to be an extremely competitive market place but one, as the recovery gathers momentum, that will remain a target for the majority of hotel investors, developers and operators with their eye on long-term gains (Murphy, Maguiness, Pescott, Wislang, Ma & Wang, 2005).

Worldwide, the majority of international tourist trips in 2004 were for the purpose of leisure and holidays (52%) with only16% being for business travel. The rise in the number of people (both international and domestic visitors) to London has been relatively modest since 2000, with the number of visits only now returning to the high point reached at the Millennium. However, over the long term there has been a steady increase in visitors to London. Nights stayed in London by international visitors have risen on average by 3.1% each year since 1993 (compared to 1.6% each year for the UK as a whole (Greater London Authority, 2006). In 2004, 33% of overseas tourist trips to London were for holiday, 27% were for business and 28% were for the purpose of visiting family and friends (IPS 2004, 2005 Growth has been particularly strong in 2004 and 2005, with growth of over 14% in 2004 and estimated growth of 6% in 2005.

However, growth was relatively modest in the early part of the 2000s with a number of circumstances (such as low cost airlines, exchange rates, terror events) reducing overall tourist arrivals, impacting on both overseas and domestic tourists. The events of September 11th had a similar effect on tourism, with the number of visits only returning to their 2000 high point in 2004 (Robbins & DeCenzo, 2007). The London bombings in July 2005 had only a short term impact on overseas visitor numbers with visitor numbers rebounding in the latter part of 2005.7 It should be noted that the PwC report produced in 2002 did not include the short-term downward trends noted above since these trends were only just in the cycle at this point (Greater London Authority, 2006).

Domestic visitors to London have also increased dramatically, given the ‘one of a kind’ millennium celebrations; the opening of several new and attractive tourist attractions. Until recently there has not been a proper understanding within central or local government of the importance of business tourism or its contribution to the local and national economies. One business tourist is worth at least three times the amount of one leisure tourist in employment and economic terms and business tourism is worth ?3.2bn to London, making the business tourism sector an important area for London to invest in. London, being a metropolis destination always had immense potential as a business destination (Hooley, Saunders, Piercy & Nicolaud, 2008). Understanding that potential, the government and the hospitality industry has finally started taking steps in this regard.

Currently the city lacks facilities that would allow maximum exploitation of the city’s potential but work has started on those lines. An international chain has just initiated “Duchess Rooms” in order to attract the businesswoman of today – especially the Middle Eastern market (Honeycutt, Ford & Simintiras, 2003). However, there remains a great deal of work that the city administration can undertake in a bid to rejuvenate the city’s illustrious image.

London caters to a wide variety of visitor specific accommodation needs. The only exception is the apparent lack of accessible accommodation for disabled visitors. Visit London estimates that serviced accommodation (including hotels, bed & breakfast establishments and guesthouses) accounts for around 76% of all bedrooms (with the remainder comprising self-catering, hostels and university accommodation) (Jensen, 2008). The budget hotel market growth and the increasing investment in up market hotels has led to a polarization in supply and gradual erosion of the three-star serviced hotels previously provided by Thistle and Marriott amongst others. It is possible that a situation could occur in the short to medium term where hotel grading and quality/service provision at the budget end of the market, could become blurred to some buyers (Guffey & Loewy, 2010).

With the near saturation of roadside and motorway sites, greater flexibility will need to be shown by both planners and developers if this demand is to be satisfied. For example some solutions may include the alteration or refurbishment of redundant buildings into hotels, rather than completely new build, as well as the development of sites around the M25 corridor and other key transport corridors. The continued growth of London s financial sector will mean more developments geared to this market and the meetings/ business tourism market generally. This is likely to include larger developments with leisure facilities, more bedrooms, but also with more flexible meeting facilities and (subject to planning), apartments, apart hotels, or even hotels with apartments located very close by that can enjoy the hotel s facilities ( e.g. Capital, St James and Ritz Hotels) (Hitt, Ireland & Hoskisson, 2009).

3. An analysis of Possible Segmentation strategies that the Shangri La could adopt

This refers to the process of choosing one’s target market. It needs to be clarified at the onset that marketing targeting is not synonymous with market segmentation. Segmentation is actually the prelude to target market selection. One of the most significant advantages of effective target marketing is that it improves the efficacy of all the four P’s of marketing (Aaker, Kumar, Day & Leone, 2010). The use of segmentation, as a tool to distinguish the entire market into “stratas” is a useful process. Firms can then decide which segment they are targeting and focus their efforts and energies towards that segment in order to achieve the highest return on investment (Robbins & DeCenzo, 2007).

Positioning, on the other hand, is a concept introduced in “Positioning – a Positioning – a battle for your mind”. According to the authors ‘Positioning is what you do to mind of the prospect’. Meaning it is how the customer perceives your product or what you are in the eyes of the beholder! Thus it is imperative that each brand is ‘Positioned’ in a particular class or segment (Al Ries & Trout, 1993).

Given the turn of the millennium and the growth witnessed in travel, each segment in the tourism industry has set its goals on increasing its share of the pie – thus trying to appear most attractive to the target audience. In this case, marketing communication helps differentiate similar accommodations and travel hot spots in terms of making their spot appear the most attractive (Arbuckle, 2000). But also in this case, it becomes essential that the target segment for the integrated marketing communication is identified beforehand. It is essential that marketers ensure that the destination is not competing with a competitor with greater edge; secondly, that the destinations’ position is not vague in the customers mind and lastly that the destination has no image or probably a negative image in the eyes of the customer. (Lovelock, 1991).

The hospitality industry based on the diverse nature of its offerings also witnesses a variety of positioning strategies. “The meeting place for sun worshipers”, is the positioning statement of Cancun, Mexico. However, positioning can vary greatly. Fisher Island has positioned itself as “where people who run things can stop running”. It all depends on the creativity of the positioning team (Bergh & Ketchen, 2009). An interesting positioning statement is that of Ritz-Carlton Hotels Group; it says “After a day of competition, you deserve a hotel that has none”. The degree to which marketing teams strive to be unique determines the extent to which a positioning statement is distinctive and appealing.

“By developing a creative campaign, an operator can market the fact that many Japanese visitors have been to the Grand Canyon, and were impressed by its awe-inspiring presence. This may include testimonials from previous visitors or tour operators’ example to illustrate this feeling who can make a direct appeal to the target market. However, since the feeling of awe is an intangible construct, positioning statements must show a tangible (Young, Weiss & Stewart, 2006).” There are many ways of communicating to the audience the position you want your brand to occupy in the customers mind. They might include a creative campaign; a testimonial by celebs’ or by previous visitors etc, but it is necessary to be able to convey the inspiration and the other intangibles associated with the brand.

The London hotel market could be segmented into several groups namely, bed & breakfast, inns, hotels (five star, four star etc,), country hotels, motor lodge hotel, town house hotel, youth & groups to name the broadest categories. The composition of branded hotels and luxury outlets in London has soared to around 13% of the total supply in the capital, with chains such as Whitbread, Premier Travel Inn, Travelodge, IHG s Express by Holiday Inn, Accor, Ibis, Choice, Comfort Inn and Quality Hotels increasing their exposure (Blaxter, Hughes & Tight, 2006). This growth in the budget hotel market throughout all parts of the capital, as elsewhere, has been the key trend in this industry over the last decade. In London, particularly, it has to some extent, replaced the traditional three-star hotels which were more in evidence in previous decades. The cost of building a three-star establishment, with its higher specifications, service and food requirement is generally considered to be prohibitive in London.

The gradual erosion of the mid-market three-star brands in London has possibly contributed to accusations that the capital is expensive and does not provide value- for money , Given that budget hotels have only been so evident in recent years and that central London prices are (like most major cities) high, this is unsurprising (Easteryby-Smith, Thorpe & Lowe, 2002).

However, as we will see later, both Paris and Geneva recorded higher average room rates than London in 2005. It is perhaps the perception of expensive that has to be addressed. In the central sub-region, it is still difficult to find cheap accommodation, unlike say Paris or Amsterdam and it is unrealistic to expect budget hotel developers to invest in the more expensive areas of the central sub-region, such as Westminster or Kensington and Chelsea, to any great extent. The dynamics of hotel demand and this industry’s development and operation economics will mean that future up market hotel development will continue to be more viable centrally. The international business visitor and high spending US, Arab and Japanese leisure tourists for example, will still choose to be In this context it should be recognized that a branded budget hotel, with limited service may still be awarded a two star grading, the same as a quality inn in the regions with good service, but limited facilities (Greater London Authority, 2006).

Hotels in London are concentrated in the central area, but are increasingly being distributed more evenly across London, located where the main attractions, retail and restaurants are located. “The luxury sector is amongst the fastest growing sectors in London – there are reports that as many as four thousand additional rooms can be operational in the next five years (Greater London Authority, 2006)”. The industry is set to become increasingly dependent on exotic marketing and luring of customers and tourists that arrive in London each year. It will require a “survival of the fittest” strategy from all major players to see through the competition.

Thistle is the largest provider of hotels and hotel bedrooms in London. The company has some 5,969 bedrooms, which equates to 6.4% of the total London supply of serviced accommodation. Hilton follows closely with 4,662 bedrooms (Greater London Authority, 2006). Both these groups operate in the upper tier category. The Inter-Continental Group operates across the tiers with its 5-star hotel in Park Lane, 4-star Holiday Inns and the budget brand Express by Holiday Inn. Accor, with its range of brands, provides bedrooms in each category, from the 5-star Sofitel to the 4-star Novotel, 3-star Ibis and budget Formula.

The main branded hotels comprise 12% of the total number of serviced establishments and 38% of the number of bedrooms in serviced accommodation. The identified branded hotels are most dominant in the high-end of the market, comprising over half of all 4 and 5 star establishments in London (Greater London Authority, 2006). The above mentioned names also will be Shangri La London’s main competitors. However, the difference between niche marketing and direct competition will prevail in this scenario. It is necessary for Shangri La to ensure that it is able to position itself well, with respect to its competitors (Etzel, Walker, Walker & Stanton, 2007).

The international business visitor and high spending US, Arab and Japanese leisure tourists are the main segments that Shangri La will target. As per the Greater London Authority carried out under the London government, he conference and incentive travel industry has evolved over the past few decades into a mature business sector. It is increasingly clear that businesses and associations cannot function effectively without face-to-face meetings. Over the ten years to 2004, there was a 50% increase in all business trips (with 27% of overseas visitors travelling on businesses to the UK in 2004) exceeding the overall tourism growth rate (Gilgeous & Chambers, 2001).

On a global scale, 16% of International tourist arrivals worldwide were for the purpose of business in 2004. For Shangri La, the discerning business and leisure travelers are the prime focus. The majority of the customers for Shangri La should hail from this segment and thus should be targeted using appropriate and relevant strategies (Young, Weiss & Stewart, 2006).

The positioning of Shangri La for the assigned market segments in London will be truly psychological image based positioning – aiming to create a unique position in the consumers mind on the basis of the classic Asian Flavor visible prominently in the corporate culture of the organization and in the nature of the hospitality services provided.

Introduction

In legal terms ‘Law’ is defined as, “a rule of conduct or action prescribed or formally recognized as binding or enforced by a controlling authority: asA aA :A a command or provision enacted by a legislature”.

Basically it is a set of regulation and regulations of conduct, which are practiced in general. These rules and regulations are bound by legislature.

In this assignment I will be discussing law in context with Consideration and Contract.

Question 1:

Marketing emphasises on meeting the needs of the consumers and providing them with value, and benefits, while at the same time handling the organisation in an efficient and profitable manner.

Marketing is a process that involves constant adaptation and implementation of the varying consumer trends, and demands. While at the same time having a competitive advantage over the competitors, and while at the same time ensuring that the satisfaction of these needs result in a healthy turnover for the organisation.

Objective of the coursework:

The objective of this assignment is to analyse the Manor House Country Club Hotel’s (MHCCH) external environment and internal environment. I shall use PESTEL Analysis, Industry Analysis and MHCCH’s Opportunity and Threat analysis to draw out the company’s external environment and Core competencies, Value chain, Ansoff Matrix, strength and weakness of MHCCH will be applied to illustrate the internal environment.

Overview of the Hotel:

In 1992, Manor House Country Club Hotel was established as a family owned business by the Jenkins Family, in Singapore. The MHCCH spans over 3 acres of prestigious reclaimed land, and is operating currently as a single hotel. The Hotel provides various varieties of Luxurious accommodations, and serves tourists from around the World. The hotel also serves its customers with various types of cuisines, from its modernised Restaurant; the hotel also has Bistro that is licensed to sell alcoholic drinks. For corporate meetings and conferences to be held in the hotel, the hotel has adequate premises and facilities. And other miscellaneous services provided by the hotel include a Beauty Salon. In short it can be said that the MHCCH stands up to the luxurious benchmark that it projects.

Analysis of the Micro Environment: (Internal)

The Micro/internal factors are the forces inside the hotel that can affect the performance of the hotel, thus through the micro environment analysis, we search for and devise a strategy to overcome those shortcomings that might hinder the progress of the hotel.

SW (Strength and Weakness) Analysis:
(S)trengths:
The MHCCH is located at a prime and favourable location, which is easily accessible.
The MHCCH successfully depicts its Luxury position in the tourism and hospitality industry, thus differentiating it from the competition.
It is licensed to serve alcoholic drinks in the hotel, thus widening its consumer base, and scope for profitability.
Additional accommodation was added by MHCCH in 2002, so now it can house more customers, hence an increase in productivity.
The Market value of MHCCH is eight times more than its actual value, which is the sign of a profitable and stable business.
(W)eaknesses:
There has been a consecutive decline in the number of corporate clients for the Hotel in the past years, while the number of trade conferences held in the country has gone up by 30%.
Over pricing of the room rates above the average price level for similar rooms in other competitive hotels may lead to a decline in the number of customers.
As for the current situation the MHCCH lacks direction in terms of a strategic plan for expansion, and its target consumers, those are essential for the development of the MHCCH.
Recommendations:
MHCCH can provide better meeting/conferencing facilities to its corporate clients to up the number of corporate bookings. Also it can reconsider its pricing policies and provide trade discounts to its clients.
The accommodation/room tariffs to be priced at a market competitive rate, and not at exorbitant prices, which might set the customers off.
A strategic marketing and action plan to be set by the MHCCH while keeping its prime priorities in focus.
Conclusion:

The shortcomings of the MHCCH are not of a major nature, they can be rectified by adopting simple corrective actions, like a strategic plan. It is quite natural for any organisations to face hurdles in its developmental phase.

Core competencies: (Micro Analysis)

Core competencies are what makes an organisation different from others, in most cases its’ direct competition. The MHCCH can develop its core competency on the basis of its luxury position in the market. It must aim at providing quality services to its customers at competitive prices. This also increases its foothold in the competitive market. As it is in the core culture of an organisation, to satisfy its customers and providing them the value for their money, that is what constitutes the basic differences among the various organisations.

Value chain: (Micro Analysis)

The basic motive of the value chain is to provide the customers with a certain level of value that surpass the cost of the activities and ultimately it appears in a profit margin. The value chain of MHCCH is presented below:

Quality Service: The hotel management has to ensure that the customers are provided with high quality services that are worth the price that a customer is paying. So that the customer is satisfied.

Satisfaction of customer needs: The second step is to meet the specific needs and demands of the customers as per their tastes and preferences, as the service industry tends to be very personal, tailor-made arrangements have to be made to meet the customer needs.

Trained and Efficient staff: Every customer expects to be treated in the most hospitable and best manner possible, thus MHCCH should be certain that the staffs is well-trained and efficient when it comes to dealing with the customers.

Marketing and Brand building: In this stage, MHCCH is looking for potential buyers to sell the services it offers and to do this they do advertising, pricing etc. And build a reputable image in the market, which is also a crucial factor to Customer satisfaction.

There are some aiding factors to the points discussed above which cannot be fulfilled without the help of these:

1). Infrastructure:

The aesthetic appeal of the hotel is a crucial factor of the quality it signifies in its service, thus the infrastructure should be as enticing and attractive as the services provided within the MHCCH.

2). Specialisation:

To satisfy the specific customer demands, the hotel has to keep in mind that meeting those demands is crucial and difficult at the same time, thus specialisation in fulfilling the customer needs is an essential supporting factor.

3). Human Resource Management:

The staff must be recruited and accordingly trained to deal with its customers, as the employees of MHCCH reflect the image of the hotel itself. Thus HRM is a bare necessity in the strategic planning process.

4). Marketing Research:

With proper analytical tools and a better understanding of the market, the task of marketing becomes much easier for MHCCH, leaving a long lasting impression in the customer’s mind.

Macro analysis: (External)

By scanning the macro the environment, the company can devise a better strategy towards overcoming the identified threats and to utilize the available opportunities.

OT: (Opportunities and Threats)

(O)pportunities:
Tapping the benefits of the high growth of tourism industry in Singapore.
High demand of varying cuisines/lifestyles.
Scope of expansion in conference/family travel groups.
Expand the MHCCH brand by investing in external property, through borrowing/re-investing profit.
(T)hreats:

Highly competitive hotel industry, competitive pricing, similar services, etc. If proper steps to maintain and expand MHCCH are not taken, then this could be a potential threat to the hotel.

Lack of Differentiation is another factor that serves as a threat to MHCCH as there are various segments i.e. budget youth hostels, five star hotels, backpacker lodges, etc. MHCCH should hold on to a particular segment and differentiate itself from others on its basis.

Increasing Bureaucracy and the various new rules and regulations imposed by the government can cause hindrances in the expansion plans of MHCCH, e.g. licenses and permits required to carry out some activities in the Hotel.

Pestel Analysis

PESTEL represents Political, Economic, Social, Technical, Environment and Legislative factors which are external in nature. The current and future change of six key areas can affect the MHCCH’s business. The PESTEL analysis explores the broad environment in which the MHCCH is operating.

Political Factor: These contain the rules and regulations implemented on the Hotel by the Government. The Singapore government is inclined on increasing its popularity as a tourist destination, thus a beneficial factor for MHCCH.

Economic Factors: Singapore is among some of the fastest growing eastern economies, thus the GDP and the public spending is on a constant rise, so is the purchasing power of the citizens of Singapore and the Tourists. Again it’s in favour of MHCCH.

Social Factors: The Cultural and social aspects of a country are highly important to the business, the current trend of the growing demand for new styles of food and drink is a sign of the change in the social factor.

Technological Factors: Technology is directly linked to modernisation, the hotel has to keep up to date with the latest technological changes in the business environment, for e.g. Wireless internet, Computer bay, HDTV’s, etc. This improves the quality and quantity of the stay of the customers.

Environmental Factors: Drastic changes are occurring in the global environment nowadays; also environmental awareness is becoming more common by the day. Environment friendly applications need to be adopted by MHCCH to balance its responsibility towards the environment.

Legal Factors: The MHCCH must abide by the legislation operating in their geographical territory (Asian Legislation). This affects their business hugely. It may serve in or against their favour, depending on the legislation.

Part B

The Manor House Country Club Hotel can expand its business in within the next two years by following these strategies/theories.

Ansoff Matrix:

The Ansoff Matrix is useful in deciding the company’s product and market growth strategy. The Ansoff Matrix in reference to MHCCH is:

Market Penetration: MHCCH is building a stronger market position by providing similar luxury services as the other hotels in the same market.

Market Development: MHCCH is investing in its site to develop its unused land into small leisure centres. These investments are aimed at developing a stronger position of the hotel in the market.

Product Development: The main focus of MHCCH is on developing its service package by improving the infrastructure and attracting more customers. By investing in the hotel, the services they offer can be developed

Diversification: This involves MHCCH entering a business that is not currently a part of their agenda, which at the moment it is not doing, but they can consider diversification into the alternatives in future, as it leads to added income and goodwill.

Porter’s Grid

Porter’s Grid is also well known as Porter’s Five Force analysis. These were developed by Michael E. Porter. The competitive environment of the MHCCH is explored in depth through the Porter’s analysis below:

1). Bargaining power of the Supplier:

The supply in this industry is largely based on FMCGs (Fast Moving Consumer Goods) which is quite flexible considering the fact that the Hotel buys its supplies in bulk quantities. Thus the ready availability of the goods by the suppliers and the perennial demand of the goods limit the bargaining power of the suppliers.

2). Bargaining power of Buyers:

There are many alternatives to choose from for the customers of MHCCH as there are rooms of varying levels of luxury and prices, ranging from basic single-bed room to ultra luxury Suite packages. There are other hotels offering similar rooms to them at competitive prices, thus buyers do have their share of bargaining power in this case.

3). Threat of new entrants:

The hotel industry in Singapore is facing tough competition not only from the entry of locally based hotels but also giant multinational hotel chains, the new entrants might turn up as a threat for the company.

4). Threat of Substitutes:

MHCCH basically provides accommodation oriented services to its customers, while there are a large number of substitutes available for them, to obtain similar services. The main differentiating factor here is pricing, and the difference in the quality of the services. There exists a strong threat of substitutes, but with a well planned pricing policy, this threat may be avoided.

5). Rivalry among competitors:

Rivalry among competitors is fairly high for MHCCH as the rivals offer the same services/products, and they operate in the same market and environment. While at the same time there are new competitors entering the market. And also the buyers have the power to buy the services/products at lower prices.

Conclusion

As of now MHCCH is operating as successful enterprise, which through proper strategic planning can be developed into a much more flourishing business, and a highly successful hotel.

But for Manor House Country Club Hotel to successfully expand its business in the next two years, it is advisable for them to adopt the Market/Product development strategy, as it provides them with an opportunity to utilise their available resources in an optimum manner, while at the same time continuing the routine functioning of business.

The Indian Hotel Company Limited (IHCL) is an Indian based Hospitality Company which provides accommodation services in four different market segments globally. The company has its headquarters in Mumbai, India. It is listed in Bombay Stock Exchange (BSE).

Company strategies

The growth strategy of the company is to operate 20,000 rooms from the current 14,000, in 25 major destinations around the world. They target on a group turnover of US$ 2 billion, from which 33% would be from international operations by 2012.

Company operations

The company portfolio comprises of 4 brands; The Taj hotels which concentrates on luxury market, The Vivanta which is upper upscale, The Gateway hotels which is upscale and Ginger their budget hotels. The company operates India’s only wildlife lodges called Taj safaris in joint venture with CC Africa.

Company Background

The Indian hotel company limited (IHCL) was established in 1902 by Mr Jamshedji Nusserwanji Tata. In 1903 the first hotel Taj Mahal Palace was opened in Mumbai. The year 1974 saw an expansion of the company by opening its second property at Goa and went on adding properties at a rapid rate fuelled by the Tourism growth in India. Till date it has added 104 properties across the globe to its portfolio. The company is listed on Bombay stock exchange (BSE).Tata sons limited which is the parent company holds 28.5% equity capital in IHCL.

Parent Company

The Tata Sons limited was founded in 1868 by Jamsetji Tata. It has its presence in various sectors such as Steel, Automobiles, Information technology, Communication, Power and Tea. It operates in more than 85 countries across 6 continents. It has a group turnover of over Rs.124, 970 crores ($24.5 bn). It accounts for nearly 6% of the total market capitalisation of Bombay Stock exchange (BSE).

Stakeholders
Shareholders
Key people
Mr. Ratan Tata: Chairman of Tata sons Limited

He became the chairman of the Tata sons in the year 1981 which is the largest Indian conglomerate. The group comprises of companies namely Tata motors, Tata steel, IHCL, Tata consultancy services (TCS), Tata Power, Tata tea, and Tata Telecom.

He graduated from Cornell University in architectural and structural engineering and joined the company in the year 1962. In 1971 he was appointed as the director in charge of NELCO which was in strong financial crisis. His risk taking capability and vision made him the successor of JRD Tata.

Tata sons under his leadership made a number of acquisitions such as Chorus steel, Jaguar motors and Land Rover. This made the company’s presence in global market.

Mr. Raymond.N.Bickson : MD and CEO of IHCL

He joined IHCL in the year 2003 as chief operating officer of the luxury segment. In the same year he assumed the responsibility of MD and CEO of the company. He carries more than 30 years of international hospitality management experience. Prior to IHCL he worked nearly 15 years as a vice president and general manager for The Rafael group.

An American national, Mr. Bickson attended the Ecole Hoteliere Lausanne in Switzerland and Advanced Management Programme at Harvard Business School. He is an active member of Leading hotels of the world and World travel & tourism council.

During his tenure, IHCL went through rapid expansion by acquisitions, managing contracts and joint ventures at domestic as well as international market.

Mr. Anil P Goel : Executive Director Finance

He overlooks the Taj Group’s Finance, Mergers and Acquisitions, Purchase and Legal & Secretarial function. He is a non-executive director for Taj GVK limited.

Mr. Abhijit Mukerji : Executive Director – Hotel Operations

He oversees hotel operations of the Taj Hotels Resorts and Palaces which include Taj Luxury Hotels – India and International, Taj Business Hotels, Taj Leisure Hotels, Taj Spas, Taj Trade and Transport and Indi travels.

Mr. Ajoy K. Misra : Sr. Vice President, Sales and Marketing

He represents Taj in industry organizations such as the World Travel and Tourism Council, India Initiative (WTTC II), World Tourism Organisation (WTO), Hotel Association of India (HAI), Bombay Chamber of Commerce and Industry, and the Confederation of Indian Industry (CII). He served as General Manager of the Taj President in Mumbai and Area Director in the Sri Lanka and Maldives region.

Mr. Prakash V. Shukla: Sr. Vice President, Technology and Chief Information Officer.

He is currently responsible for total IT deployments at the Taj Group and is on MD’s management committee.

Mr. H.N. Shrinivas: Sr. Vice President – Human Resources

Mr. Shrinivas has worked for 18 years with the Taj in Human Resources, Learning & Development and Business Excellence functions. He holds a Master’s Degree in Social Work from the National Institute of Social Sciences, Bangalore, and a Masters in Industrial Law from Bangalore University.

Mr. Veer Vijay Singh : Chief Operating Officer – Upper Upscale Hotels

He is responsible for the Operations and Overall Performance of 36 hotels in 26 locations spread across seven countries under upper upscale category. He graduated from IHMCT&N, New Delhi and had the opportunity to enhance his skills by attending training programmes conducted by Cornell University Singapore, INSEAD & Harvard.

Ms Jyoti Narang : Chief Operating Officer – Luxury Division

Taj Hotels Resorts and Palaces

She is responsible for the overall development and operations of the luxury category hotels. When she was the Chief Operating officer for the upper upscale division, she was instrumental in pioneering the launch of Taj Safaris which is a unique concept that offers adventure tourist a distinctive wildlife experience. In 2008, Ms.Jyoti was appointed as the Chief Operating Officer of The Gateway Hotels, the new upscale brand of the group, and was involved in developing the concept and launching the brand.

Mr. P.K.Mohankumar : Chief Operating Officer

Gateway Brand

Mr. P. K. Mohankumar has over 35 years of experience in hotel operations with the Taj Hotels, Resorts and Palace. He is an alumnus of Institute of Hotel Management, Mumbai and has participated in several senior leadership workshops conducted by Harvard Business School, Michigan University, USA, Cornell University, Singapore and IIM, Ahmedabad. Currently, he is the Chief Operating Officer of the Gateway hotels, and is responsible for the operations and performance of 19 properties in India.

http://ehis.ebscohost.com/eds/pdfviewer/pdfviewer?vid=3&hid=102&sid=ce8939c4-8df1-4962-9afe-f373f4140a95%40sessionmgr112 accessed on 23 Nov

Sustainable Tourism

EARTH (Environment Awareness & Renewal at Taj Hotels)

The EARTH program was launched in August 2008, put forward to reduce the impact of the Hotel group’s daily operations on the environment. EARTH programme has received certification from Green Globe. Currently 55 properties under IHCL are certified and the company is looking forward to put all the hotels under the certification by 2009-2010. The company focus on improving energy efficiencies, water management, solid waste management which helps to reduce the strong impact on environment.

Porter’s five forces

Competition plays a major role in today’s world. Competition can have both beneficial and unfavourable effects. Competition for profits goes beyond established market rivals to include four other forces as well. They are Customers, Suppliers, New Entrants, and Substitute products. To understand industry competition and profitability, we must analyse the industry’s structure in terms of the five forces.

Threat of new entrants: New entrants can put pressure on prices, costs, and the rate of investment necessary to compete. Due to globalisation and rapid economic growth of Indian market a favourable market has emerged for International hotel chains. Hotel chains like Four seasons, Marriott International Inc., Starwood Hotels and Accor Hotels have recently came up with projects across India. New International hotels such as Shangri la, Mandarin, Movenpick and Ritz Carlton are in pipeline. Entry of non-hospitality companies into hotel sector can be a threat; such as Reliance Industries. Due to dilution in the market the profitability of IHCL can be at stake.

Bargaining power of suppliers: Suppliers have more power if they have the monopoly or do not depend heavily on the industry for its revenues. As hospitality industry is hugely labour oriented, their trade unions and labour suppliers are powerful. As hotels chains are looking for rapid expansions and prime properties, the power of property owners is high. Inbound tour operators are having an upper hand as they provide huge volume of business to the hotels. Infrastructure suppliers have moderate power over the company.

Bargaining power of buyers: Powerful customers demand more value by forcing down prices for better quality and more services. This results in higher operating costs thereby bringing down profitability. Corporate clients due to their huge volumes have negotiated rates. Company had to come up with loyalty programme for retaining customers which incurs costs.

The threat of substitutes: A substitute does the same or a similar function as an industry’s product by a different means. The threat of a substitute is high when it offers an attractive price and service to the similar industry’s product. Luxury serviced apartments, camping and lodges are in demand. The Government’s introduction of bed and breakfast hotels can really be a threat. Web 2 which enables video conferencing is an emerging product which can be a threat to MICE (Meetings, Incentives, Conferencing and Events)

Rivalry among existing competitors: Rivalry among hotel chains results in discounting of price, new product launch, advertising campaigns, and improvement in service. If there is high rivalry the profitability of the company can be affected. The hotel products are highly perishable, which creates an urge to cut prices and sell the inventory below its profitable rate to cover the fixed cost.

Internal environment of the company:

The internal environment of the company can be divided into two types they are Tangible and Intangible resources.

Tangible resources include assets which can be seen and felt, like physical properties, Yachts, Flights, and other fixed assets which spread around 5 continents.

The intangible resources are the one which cannot be seen or felt but play a major role in the business like the brand value, Leadership style, Human resource etc.

IHCL being the subsidiary company of Tata Sons Limited, which has a company background since 1868. IHCL itself operates in hospitality sector in India for last 108 years, and have the market share of 22% in India shows the brand value of the company. In terms of leadership style the company has a style of innovations and pioneer of Luxury property and wild life lodges (Joint venture with CC Africa) and budget hotel chains (Ginger Hotels), Spa resorts and properties in India.

The human resources in the company is around 20,000, which includes permanent staff, Fixed term contract workers and other Executives and Corporate staff. The company has various staff development program such as TMTP (Taj Management Training Program) SPEED PLUS, HOMT for standardization of operations throughout the company.

External Environment:

It can also be called as Operating environment. Factors which influence organizations opportunities and risks; such as conditions, entities and events consists of its external environment.

PEST Analysis
Political:

Political instability in some parts of India made foreign investors cautious; in turn brought down investment from abroad and business travel. Due to the recent terror attacks on hotels in Mumbai, there has been a drastic drop in tourists arrivals. Most of the Embassies have send travel advisory regarding African and Asian countries which has reflected tourist inflow. As Government of India has reduced the tariffs and duties on various items, trade relations have improved. It encouraged travel and trade which resulted in growth of hotel industry. The Ministry of external affairs has implemented visa on arrival for several countries in an effort to promote tourism. The government has released a five-year tax holiday to promote the growth of new hotels. External Commercial Borrowings have been eased by the Ministry to elucidate the problem of liquidity being encountered by the hotel industry due to economic slowdown. The Ministry of Home Affairs has agreed to grant Long Term Tourist Visa of 5 years duration with Multi-entry facilities carrying a condition of 90 days on each visit to the nationals of the following 18 countries which are France, Iceland, Germany, New Zealand, Luxembourg, Japan, Netherlands, South Korea, Belgium, Argentina, Finland, Brazil, Spain, Chile, Switzerland, Mexico, Norway, and Vietnam on request of tourism ministry.

Economical:

Early 1990’s saw economic liberalization which led to a boom in the hospitality industry. The Government has allowed Foreign direct investment and Foreign institutional investment; which favours business travel. Compared to other South East Asian countries; tax structure in India is very high. Inadequate infrastructure facilities like Airports, Communication facilities and commuting facilities is a challenge for the Tourism sector. The effect of recession is causing serious problems for many hotels especially luxury hotels in particular. Hotels in certain global markets, mainly those operate in leisure sector, are less affected. All geographies are not equally affected by recession.(have to include graph from the site quoted in link , leading hotels of the world)

Social:

Indian customers are highly sensitive to price. A lot of them tend to compare services offered with price. Hoteliers face a challenge to design price strategy in each sector. There is a conflict between local community and hotels on space availability especially at beach destinations. The company has got an advantage of world’s largest concentration of young educated work force and thus decreasing the labour costs. Two religious communities being Hindus and Muslims have religious sentiments towards beef and pork which is consumed by foreign tourists. This raises conflicts between the organization and religious groups. Large scale tourism operation results in environmental pollution and an increase in carbon emission.

Technological:

The launch of E-commerce has revolutionized the hotel sector by reducing cost and increasing functionality. The introduction of Global Distribution System allows customers to access current time availability of products. The growing influence of video conferencing has got negative impact on MICE (Meetings, Incentives, Conference and Events) division. It is possible to get critical information on clients and products while away from desk due to wireless technology. This has improved customer relationships, saved time and increased revenue and profit.

Indian Tourism Scenario

Despite a drop in FTA’s in India due to economic slowdown, domestic tourism has showed an impressive growth of 15.5 % in the year 2009.Domestic tourism supported the industry during unfavourable condition.

India’s performance in tourism sector has been remarkable. During the period 1997 to 2009, India perceived an increase in the Foreign Tourist Arrivals from 2.37 million to 5.11 million. Because of global slowdown, terrorist activities and H1N1 influenza, growth rate in FTAs during 2009 fell by 3.3 per cent. The global tourism fell by 4.3 per cent. The plummet in India was less than that of the scale of global slowdown.

Foreign Exchange Earnings (FEEs) from tourism increased from Rs. 10511 crore in 1997 to Rs. 54,960 crore in 2009. The growth rate in earnings in 2009 vis-a-vis 2008 was 8.3 per cent. The percentage share of India in International tourism receipts has nearly doubled in past 12 years.

Solutions:

The Company has got only insignificant investments at political instable locations. To prevent future security threat the company has sought advice of security experts and invested heavily on improving security infrastructure.

To reduce the conflict between local community the company has come up with corporate social responsibility. For instance the company works closely with NGO’s to develop and train underprivileged housewives to earn their livelihood. The company tries to promote Indian culture by encouraging local artisans and craftsmen. This helps the local community in broadening their own outlook. Foreseeing sustainable tourism IHCL has come up with EARTH initiative to reinstate its vision and to preserve nature.

To overcome the revenue loss due to video conferencing the company came up with new strategy of marketing in- house video conferencing facilities for corporate clients.

SWOT ANALYSIS
Strengths

IHCL has a very dominant position in Indian hospitality industry with largest distribution of hotels around the country. Its key advantage is the established ‘Taj’ brand name. It has got a much diversified hotel and brand portfolio catering to different market segments which helps in capturing wider customer base. The company has got sales and marketing reach globally. The parent company being Tata sons limited which is one of the largest companies in India is an added advantage. Their presence in every segment namely luxury, upper upscale, upscale and budget allows more flexibility and stability. They have a well-diversified business model of subsidiaries, associates, joint ventures and management contracts which help in reducing risk and fuels faster growth. This asset light policy will help in revenue stability during economic turndown. Presently 45% of IHCL hotels are operated through joint-ventures, 40% are management contracts and 15% are owned in part or full by IHCL.

Source: Adapted from HotelierIndia Nov 2010, Press Release

The company has introduced a strong loyalty programme which helps in retaining customers. The company’s alliances and partnerships have helped it in entering into new markets such as wildlife lodges and air catering. They have the advantage of very strong corporate purchase chain whereby they can considerably reduce raw material cost. As the parent company is present in the production of FMCG’s they are able to procure items in a much competitive price. The company even have introduced loyalty programmes in conjunction with all leading airline companies.

Weakness

The less established brand name of the company in international scene can be viewed as a weakness. Nearly 75% of the company’s income is generated by domestic operation resulting greater dependency on Indian market. In domestic market even though company has its presence in more than 15 states; 66% of their revenue and nearly 90% of profits come from top six hotels in four cities. Even slight fluctuation in the country’s economy can affect profitability. The high dependency on higher-end luxury market can also be viewed as a weakness. Nearly 54% of the revenue is generated by these properties. Comparative size in line with international chains and insignificant international presence is a setback. The hotel industry in India is heavily staffed. In spite of international average 1:1 in India it stands at 2.1:1. Investments in acquiring international hotels have resulted in huge debt for the company.

Opportunities

Rapid growth in inbound and domestic tourism is a great opportunity for the company. Domestic tourism is growing at a phenomenal rate of 15.5% annually. Growing demand for budget and mid-segment hotels due to the growth of Indian middle class can be viewed as an opportunity. Healthy salary increases in corporate world is expected to create demand for leisure tourism. Launch of incredible India in both domestic and international market to promote destinations can be a boost in business. The introduction of medical visa may promote more volume and extended stay in all key destinations. The company’s entry into new markets such as wildlife lodges, luxury residences, and spas will create new growth prospectus. Budget airlines now have connectivity across the country with competitive rates and attractive offers which will inspire domestic tourism. Increased business opportunities in India again have paved path for growth of conference and event tourism.

Threats

Growing presence of international hotel chains such as Marriot international, The Four seasons, Accor group, Shangri-La, Dreams resorts and spas etc. can be considered as growing threat to the company. The expansion plans of Indian hotel chains like ITC India limited, The Leela group, The East India Hotel Company and The Lalit may affect the market share of the company. Due to the arrival of international airline operators and affordable international travel, there has been massive growth of outbound tourism mainly to south East Asia, Europe and Australia. This has increased risk for domestic leisure segment. Due the company’s portfolio of foreign currency debts, it is vulnerable to fluctuations in currency and interest rate risks. The debt equity ratio of the company shows drastic hike from the previous years which can really be a threat .

Source: Adapted from Annual Reports

“Debt to equity ratio indicates how the firm finances its operations with debt relative to the book value of its shareholders equity” (Fabozzi and Drake 2009 pp80). This indicates the comparison of equity and debt the company is using to back its assets. If the ratio is high then the company is said to be chancy as it is financed more by with debts and it might become even worse if the interest rates are high.

The company stands at a threat as the debt equity ratio shows a trend of escalation from .52 to .99 within a span of 4 years.

Strengths and Opportunities

Due the company’s presence across the country in different market segments it can capitalize the growth of domestic tourism. As the company has a well-established budget and mid-market segment hotels, it can benefit from the growing spending power of Indian middle class. Only IHCL has presence in wildlife lodge segment which shows growing demand every year. Loyalty programmes in tie-up with leading airline companies have resulted in greater exploitation of tourism growth in India. Company’s entry into wellness tourism by establishing Spas in its existing properties can milk governments plan to issue medical visa.

Strengths and Threats

By virtue of the company’s loyalty programmes and corporate tie-ups they would be able to hold to their market, even though new international players could stand a threat. IHCL have huge expansion plans in answer to other domestic hotel chains. By their plans to expand internationally it can lower the risk of outbound tourism.

Weakness and opportunities

Since domestic travel became cost effective, domestic leisure tourism turned robust and distributed, consequently reducing risk of concentration of revenue from key city hotels.

Weakness and Threats

To oppose the dependence on high end luxury market, the company has entered into budget segment which is stable comparing to the later. The company have international expansion plans other than existing properties outside India so that it will be resistant to domestic economic fluctuations.

Diversification

The IHCL has diversified its operation in hospitality sector from the hotel operation to other sectors like Air catering, Spa operations, Wild life lodges, Yachts, Charted Flights and Taj Khazana.

TajAir

TajAir is a charter flight operating company owned by IHCL, the subsidiary company of Tata Sons Limited4 pioneer aviation operator in India. TajAir at present owns 3 Air craft’s which can be chartered by guests for domestic and international air travel.

Ginger Hotels

The Ginger Hotels are self-service budget hotels operated by IHCL which targets mid-market sector.

Spas

Jiva Spas the subsidiary of IHCL which operates at more than 25 Taj hotels at 20 different destinations which offers different rejuvenating treatments and massages.

Taj SATS

Taj SATS is an air catering division of IHCL in collaboration with Singapore Air Terminals which caterers to domestic and international flights operating from 6 different cities.

Taj Safari

Taj Safari is a wild life lodge which operates in collaboration with CC Africa which is one of its kinds in India.

Taj Khazana

Taj Khazana is a signature boutique store of Indian handicraft, Jewellery and garments which operates at selected IHCL properties.

Current Situation

The Company has decided to raise Rupees 850 crores by issuing shares and warrants to the promoter company Tata Sons Ltd to fuel its rapid expansion plans.

Since the market is strong now the company has decided to raise its room tariffs by 10-15 percent.

The company announced the roll-over of 19 hotels under its new brand Vivanta by Taj Hotels and Resorts. The introduction of Vivanta which is a brand architectural exercise by the company will be slotted in the 5-star upper upscale segment in the Indian hospitality industry.

To exploit the on-going spree by Indian households on food and beverage spending, the company has rolled out several new F&B outlets in collaboration with world renowned chefs and restaurateurs.

To meet the current demands, they have invested a major share in Serviced Apartments, Wildlife lodges and Spas.

To achieve their goal of generating 33 per cent of total revenue from international operations, they are engaged in Management contracts and Joint venture oversees.

To capitalize the high demand of mid-market segment, IHCL has unveiled more than 20 budget hotels across India named “Ginger Hotels”

In order to recover the loss of revenue due to the dip of tourism in India, the company has gone into a new strategy of putting hold on salary hike and the incentive for the executives and freeze new recruitment in the company and predicts a profit of 15 cr.

In 1955 Pakistan International Airline formed. It is the 16th largest airline in Asia, operating scheduled services to 73 destinations throughout Asia, the Middle East, Europe and North America, as well as an extensive domestic network linking 24 destinations.

PIA is three stars International Airline. In our report we did SWOT analysis and PEST analysis on PIA, identify major strength we find as leading market position, brand recognition, superior operating structure, network presence, hub airport at Karachi, and effective use of technology. Formulation on GOVT rule, High dependencies on passenger revenues, high debt, and reliance on oil prices are major weakness, opportunities are like having MAX route and fleet, growth demand for low cost airline, customer loyalty, shifting customer needs and industry recovery, and major threats are high interest rates, accidents, strong competition by Air blue, interest and foreign currency exchange rates, and decline in industry. In PEST analysis we discover major Government’s active role in increasing competition in the airline industry, inflation rate, turning of social environment of Pakistan liberal with the new regime. Innovation in technology, and its impact on distribution and cost synergies from industry consolidation.

We recommend PIA for better service to decentralized its management system, develop SBUs, adopt transparent promotion polices, employee empowerment to increase the employee motivation and moral. Try to decrease its overhead cost, adopt effective marketing policy, two way communication and TQM. Upgrade its fleet; purchase new Airplane with twin engines these will reduce the operating cost of PIA. Improve control over fares. Hire the services of IT specialists; improve service standards focusing on quality.

Pakistan International Airlines

Introduction:

When Pakistan was founded in 1947 it comprised two territories on either side of the expanse of India. It was in this unusual circumstance that Pakistan International was formed in 1955. Despite wars and economic trouble, the carrier survived to grow and prosper. Pakistan International Airlines is the flag carrier airline of Pakistan, based in Karachi. It is the 16th largest airline in Asia, operating scheduled services to 73 destinations throughout Asia, the Middle East, Europe and North America, as well as an extensive domestic network linking 24 destinations.

Its main bases are Jinnah International Airport, Karachi, the Allama Iqbal International Airport, Lahore and the Islamabad International Airport, Islamabad/Rawalpindi. The airline also has secondary bases, including Peshawar International Airport, Faisalabad International Airport, Quetta International Airport and Multan International Airport, from which it connects the metropolitan cities with the main bases, the Middle East and the Far East. The airline is owned by the Government of Pakistan (87%) and other shareholders (13%). It has 19,263 employees (at March 2007).

AIRLINE INDUSTRY IN PAKISTAN:

There are 36 operational airports. Karachi is Pakistan’s main airport but significant levels of both domestic and international cargo are also handled at Islamabad and Lahore. Pakistan International Airlines (PIA), the public sector airline, though facing the competition from a few private airlines, carries approximately 70 percent of domestic passengers and almost equal domestic freight traffic.

The transportation sector accounts for about 10.5 percent of the country’s GDP and 27.4 percent of Gross Fixed Capital Formation (GFCF) in FY06. It provides over 6 percent of employment in the country and receives 12 to 16 percent of the annual Federal Public Sector Development Program (PSDP). Government agencies dominate the sector.

Hierarchy of PIA:

This organization is divided into following departments: Human Resource and Administration, Marketing, Corporate Planning, Information Services, Finance, Flight Services, Flight Operation, Engineering, Procurement and Logistics, Customer Services, Training and Development, Quality Assurance. The organ gram of the organization follows, with the Chairman at the top and directors of departments reporting to him.

The structure is centralized with the top-level management making the decisions.

CORPORATE VISION OF PIA:

‘To be a world class airline exceeding customer expectations through dedicated employees Committed to excellence.’

CORPORATE MISSION

“As a Symbol of National Pride, We Aspire to be a Choice Airline, Operating Profitably on Modern Commercial concepts and Capable of Competing with the Best in the International as well as Domestic markets.”

VALUES:
6.1). Customer Expectations:

PIA is the most trusted name in the industry. The reason of its goodwill is according the expectation of their customers that PIA has fulfilled always. By providing competitive tariff, extensive care, and convenience to their valued and potential customers.

6.2). Service:

PIA aims at providing valuable and unique services to its customers. They are more personalized and courteous to their customers. The services are valuable and rare; this is the reason why customers trust PIA.

28 Nov 2004, Pakistan International Airlines – PIA passed the IATA Operational Safety Audit (IOSA) benchmark for global safety management The IATA Operational Safety Audit (IOSA) is the benchmark for global safety management in airlines

KARACHI, 22 October 2007 – Abacus Pakistan officially launched Abacus Travel Secure with AIG, providing local travel agents and travelers easy and convenient access to AIG’s travel insurance policies. Available for the first time in Pakistan, Abacus Travel Secure brings real time and immediate activation of travel insurance policies to the Pakistan travel industry with a more streamlined and time saving application process for travel agents

6.3) Innovation:

PIA currently has a number of 43 fleets and aims at increasing this numbers to 53 by the next few years.PIA is adoptive to changes and believe in innovation that’s create new ideas and translating these ideas into action.

6.4) Reliability:

PIA is the most experience airline with its service with more than 53 years. This has built in PIA has become the most reliable airline. PIA is known for its loyalty and consistency.

6.5) Safety:

The most challenging responsibility of any organization is to provide complete satisfaction to its employees and customers together. This satisfaction rewards favorable and easy working conditions.

The in-flight services are customers friendly and the organizational the organizational environment is also employees oriented.

6.6) Cohesiveness:

PIA has 12 departments working in their own direction and also provides a number of services including speedex courier service, catering etc. The most impressive part is these all department and services are integrated in a cohesive way.

Services

PIA offers two types of services.

Business Class

Economy Class

Business Class

It’s the only Business Class service that feels like First Class. A comfortable seat makes all the difference on a long flight. PIA’s Business Class Seats elevate the concept of luxury to a new level, fully endorsing your decision to choose PIA Business Class Sit back and relax in our exclusive Business Class Lounges at the Karachi, Lahore, and Islamabad airports.

Our hospitable staff will ensure that you’re well looked after during your stay with us at the airport Business Class passengers arriving at Airport will receive a warm welcome from PIA.

Our representatives will walk you right through all the arrival formalities so that you don’t have to stand in line or worry about clearance.

Economy Class:

PIA’s economy class is also comfortable for passenger as Business class. Economy Class offer seats with a 32-inch pitch, adjustable footrests and “winglet” headrests for improved neck comfort. The personal TV provides on-going entertainment including audio and video on-demand choices.

Passengers enjoy the same caring service from our flight attendants, along with skillfully prepared meals and a wide range of in-flight entertainment options to choose from. Free newspapers are also provided to all Economy class passengers.

The PIA in-flight magazine, Hamsafar, is provided to all passengers on all international flights. Humsafar was introduced on PIA flights in 1980 and it is published bi-monthly.PIA is providing its service in twenty-five cites of Pakistan domestically which are as follows:

Giigit

Chitral

Skardu

Saidu Sarif

Islamabad

Peshawar

Sialkot

D.I,Khan

Lahore

Faisalabad

Multan

Zhob

D.G.Khan

Quetta

Bahawalpur

Rahim Yar Khan

Dalbandin

Sukkar

Panjgor

Sukkar

Jacoababad

Turbat

Moemjodaro

Gwadar

Pasni

karachi

Revenue Composition:

According to the latest report of PIA, 87% of revenue generates from passengers, 8% of revenue generates from cargo and remaining 5% consists of others. Fleet Pakistan International Airlines fleet includes the following aircraft (as of May 2008)

Major Competitors:

PIA is holding the first position in market. It has 48% market share. Its major competitors are Airblue and Shaheen International Airline. Airblue has a market share of 35% while Shaheen International Airline has 17% market share. People feel prestigious to travel with PIA as compare to Airblue and others.

Latest products by PIA nad qulaity achievements:

Boeing-777 operating to middle east

Flight Barcelona

Linking Abu Dhabi and rahim yar khan

Flights from D.I.Khan to Peshawar and Islamabad

Early buy cheaper fly

Bradford- Islamabad Nov stop! Pak & Glasgow

Flight from Multan and D.G khan to Dubai

Lowest business class fare paksitan Dubai

Connecting Multan and Quetta, Islamabad with Chitral and Nawabshah with Hyderabad.

Promoting web ticketing and SMS booking, Ticketing delivery at Door step

9.1) IATA Operational Safety Audit (IOSA) benchmark:

28 Nov 2004, Pakistan International Airlines – PIA passed the IATA Operational Safety Audit (IOSA) benchmark for global safety management The IATA Operational Safety Audit (IOSA) is the benchmark for global safety management in airlines.

9.2) E-Ticketing:

KARACHI, 22 October 2007 – Abacus Pakistan officially launched Abacus Travel Secure with AIG, providing local travel agents and travelers easy and convenient access to AIG’s travel insurance policies.

Available for the first time in Pakistan, Abacus Travel Secure brings real time and immediate activation of travel insurance policies to the Pakistan travel industry with a more streamlined and time saving application process for travel agents.

9.3) 3Star Ranked airline :

SKYTRAX introduced the World Airline Star Rating® programme in 2000 – the Quality Analysis system that ranks airline product and service standards, based on professional evaluation by airline audit specialists.

To achieve SKYTRAX Approved Airlinea„? status, airlines are subjected to a very detailed Quality evaluation across all areas of their front-line Product and Service standards by Skytrax – covering all areas that passengers will “typically” experience during their trip.

SKYTRAX Approved Airline evaluation covers over 750 aspects of product and service quality measurement, and is split across both airport and onboard environments – airport services based around an airline’s home base airport.

QUALITY RANKING USED IN AIRLINE RATING SUMMARY BELOW

= Excellent

= Good

= Fair

= Poor

= Very poor

:: PIA PAKISTAN INTERNATIONAL ::

a 3 Star Airline

PIA Pakistan Int’l Passenger Comments

Home Base Airport Ranking = Karachi Airport

SUMMARY RANKING

Combined Quality of Product / Staff service in airport and onboard environments

Business Class

Premium Economy Class

Economy Class

Airport Services

Check-In service – Business Class

Check-In service – Economy Class

Transfer Services – Business Class

Transfer Services – Economy Class

Arrival Services

Business Class Lounge – product facilities

Business Class Lounge – staff service

Onboard Features

Inflight entertainment may vary according to aircraft type

Cabin Safety Procedures

Inflight Entertainment

Amenities, Blankets, Pillows, Towels etc

Airline Magazine, Newspapers & other mags

Cabin Seat Comfort Seat Guide

Seating may vary according to aircraft type

Business Class – long haul

Business Class – short haul

Premium Economy Class – long haul

Economy Class – long haul

Economy Class – short haul

Onboard Catering

Business Class – long haul

Business Class – short haul

Premium Economy Class – long haul

Economy Class – long haul

Economy Class – short haul

Cabin Staff Service

Business Class – service efficiency

Business Class – staff attitude & friendliness

Premium Economy Class – service efficiency

Premium Economy Class – staff attitude & friendliness

Economy Class – service efficiency

Economy Class – staff attitude & friendliness

Responding to Passenger requests

Cabin presence through flights

Assisting Parents with children

Staff Language Skills

SWOT ANALYSIS

10.1) STRENGTHS:

. LEADING MARKET POSITION:

PIA is one of Pakistan’s leading air carriers, with more than 800 daily flights. Around 150,000 passengers a month fly on PIA, making it one of the major operators in the domestic market in terms of passenger kilometers.

PIA’s international market share was 43.5%, In the Domestic market, its market share was 69.4%. On a system-wide basis, PIA’s market share was 51.2% at the end of year 2007.Its strong market position is driven by consistently low fares as well as reliable service, frequent and convenient flights, use of new technologies like e-ticketing and self check-in terminals, comfortable cabins and superior customer service.

BRAND RECOGNITION:

PIA has high brand recall. It is recognized by travelers all over the country. PIA is a national airline, operating passenger and cargo services covering eighty-two domestic and foreign. PIA has earned the number one ranking in customer satisfaction. This strong market position gives the company a scale advantage and helps it strengthen its brand image.

SUPERIOR OPERATING STRUCTURE:

PIA has maintained its position as the low cost carrier. It has been first class Pakistani airline to use the latest technology. Factors’ contributing consists of different series of Boeing and Airbus and an efficient, high-utilization and point- to-point route structure.

Flying one type of aircraft significantly simplifies scheduling, maintenance, flight operations, and training activities. PIA has continually achieved high asset utilization and employee efficiency. Superior operating structure serves as the primary competitive advantage of PIA.

NETWORK PRESENCE:

PIA enjoys a strong network in key domestic and international destinations. The company’s network includes three the major airports in Pakistan, as well as major international airport such as Dubai International Airport. Having a strong network means that PIA can generate traffic feed for both its domestic and international Flights.

HUB AIRPORT AT KARACHI:

PIA operates from its hub in Jinnah International Airport, Karachi. Jinnah International is one of the world’s busiest airports in terms of number of passengers carried. It is also one of the largest international gateways to Asia. It is also the leading international air passenger (and cargo) gateway to Pakistan. The company’s strong presences in airports with heaviest traffic levels in Pakistan give it a competitive advantage.

EFFECTIVE USE OF TECHNOLOGY:

PIA has successfully incorporated latest technology in all its systems, giving it an edge over competitors. PIA takes credit for introducing most new technologies to the Pakistani market. It was the second carrier in Pakistan to incorporate the c-ticketing system and the second in South Asia to introduce self check in systems at the Jinnah International Airport, Karachi.

10.2) WEAKNESSES:

FORMULATION OF GOVT. RULES:

The Basic flaw of this organization is its consolidation that is centralized system. The key policies, strategies and set of laws are designed by the upper management. The centralized system is one of the biggest obstacles of long term success of PIA. PIA centralizes structure lead to barrel between different level of management, decreased motivation, hard access to information.

HIGH DEPENDENCE ON PASSENGER REVENUES:

Passenger revenues accounted for 87 percent of the PIA’s total revenue in 2007. Cargo services allow airlines to generate additional revenues from existing passenger flights. In addition, cargo revenues are usually counter cyclical to passenger revenues and have lower demand elasticity than passenger business, which allows airlines to pass on fuel price hikes to customers.

DEBT:

PIA has a significant amount of 42 billion debts. Current and future debts could have important consequences for stakeholders of the company. For example, debt could impair PIA ability to make investments and obtain additional financing for working capital, capital expenditures, acquisitions or general corporate or other purposes. Debts could also put PIA at a competitive disadvantage to competitors that have lesser debt and could also increase the company’s vulnerability to interest rate increases.

RELIANCE ON OIL PRICES:

PIA’s sustainability, growth and revenues directly depend on oil prices. A steep rise in oil prices can seriously damage the long term viability of any airline. Recently many airlines around the world went bankrupt due to rising oil prices. Airlines need to hedge against this risk by taking proper measures.

OPPORTUNITIES:
. HAVING THE MAXIMUM ROUTE AND FLEET:

PIA is having the maximum route and fleet domestic and international destinations network in Pakistan as compared to its Competitors. Route and fleet expansion will positively impact the company’s operations by increasing revenues.

GROWING DEMAND FOR LOW COST AIRLINES:

The growing demand for air travel is driven by lower fares and consumer confidence. A survey by International Aviation Authority showed that ticket price is the number one criterion for passengers when selecting a flight, well ahead of the availability of a non-stop service.

CUSTOMER LOYALTY:

PIA’s frequent flyer and loyalty programs can help it retain customers. PIA’s Awards+plus (frequent flyer program) was established to develop passenger loyalty by offering awards and services to frequent travelers. Such schemes encourage repeat travel on PIA, as passengers seek to accrue the benefits given to regular travelers. This enables the airline to retain customers and reduce costs, as it does not have to spend money targeting new customers to replace those lost to other airlines.

SHIFTING CUSTOMER NEEDS:

The needs of air passengers are increasingly changing, as they are becoming more and more price sensitive. If PIA succeeds in making its prices more competitive, then the company will be able to gain significant market share.

INDUSTRY RECOVERY:

Market analysts believe that the global airline industry will experience an upturn in fortunes over the next few years. This represents an opportunity for PIA, as it could generate increased revenues and command market share if it capitalizes on increases in demand.

. THREATS
HIGH INTEREST RATES:

The past few years have seen State Bank of Pakistan impose high as well as low interest rates to check inflation and the over heating of Pakistani economy. Inflation in Pakistan may see another raise in the short-term.

ACCIDENTS:

There had been five accidents with PIA listed as below:

Pakistan International Airlines Flight PK 705 was a Boeing 720 – 040 B that crashed while descending to land on Runway 34 at Cairo International Airport on May 20, 1965 resulting in 119 fatalities.

Pakistan International Airlines Flight PK740 was a Boeing 707-340C that crashed after takeoff from Jeddah International Airport on November 26, 1979. All 156 aboard were killed.

Pakistan International Airlines Flight 268 was an Airbus A300B4-203, registration AP-BCP, which crashed on approach to Kathmandu’s Tribhuvan International Airport on September 28, 1992. All 167 on board were killed.

PIA Flight 554 is the flight number of a Pakistan International Airlines (PIA) Fokker F27 that was hijacked on May 25, 1998. The flight started its journey at Gwadar in Balochistan after originating in Turbat, and was flying to Pakistan’s southern port city of Karachi. The aircraft was carrying 24 passengers and 5 crew members.

Pakistan International Airlines Flight 688 (PK688, PIA688) was scheduled to operate from Multan to Lahore and Islamabad at 12:05 pm on July 10, 2006. It crashed into a field after bursting into flames a few minutes after takeoff from Multan International Airport. All 41 passengers and four crewmembers on board were killed. PIA has to continuously ensure utmost safety and security of its passengers.

Accidents can adversely affect customer confidence in PIA and result in declined revenues intensifying competition.

STRONG COMPETITION BY AIRBLUE:

PIA is now competing against carriers such as Airblue and Shaheen Airline. PIA remains Airblue’s strongest competitor because of the huge market it has gained over time, strong brand image and customer loyalty.

PIA has started new low-fares subsidiary “PIA Express” to stop the Airblue market share growing to fast. Moreover, major legacy airlines have been focusing on restructuring costs, which has improved their competitiveness. With costs restructured, the legacy airlines are becoming more formidable competitors in terms of increasing capacity, matching prices and leveraging their frequent flier programs. Increasing competition could adversely affect the company’s margins.

INTEREST AND FOREIGN CURRENCY EXCHANGE RATES:

Fluctuating foreign currency exchange rates can have a significant impact on PIA’s earnings. For example, as PIA is providing its services to the UK. Negative or positive effects arise from exchange rate movements as change in expenses.

Strengthening of foreign currencies against the British Pound will positively impact PIA and vice versa.

DECLINE IN AIRLINE INDUSTRY:

A number of factors have caused the current decline in the airline industry. For example, the threat of further terrorist attacks since September 11 and a fall in the number of business travelers have both caused passenger numbers to fall.

These and other factors may continue to affect demand for air travel in the future, which will affect revenues of PIA. The threat of terrorism may discourage people from traveling by air and could especially reduce the number of passengers traveling on international flights.

PEST ANALYSIS

The macro-environment includes all factors influencing a company that are not within its control. These include political, social, economic and technological factors. These are known as PEST factors.

A technique of analysis of the macro environment is PEST analysis. Environmental analysis should be continuous arid precede all aspects of planning. Since the airline industry is very much influenced by changes taking place in the environment and has undergone rapid and dramatic changes during the last decade, this analysis is especially important for PIA.

POLITICAL FACTORS:

Political factors always have a great influence on the way businesses operate in the airline industry and the spending power of customers. In recent years it has been observed that government played an active role in increasing competition in the airline industry. A number of new airlines such as AirBlue and JS Air have been awarded licenses to enter the domestic market.

Pakistan has achieved some political stability in recent years. If the management of PIA believes that the present government will perform well (consistently), then there will be more investment in the form of purchase of new airplanes and latest technology. The over all industry will grow resulting in more luxurious and comfortable flights. With the military takeover government policies have become more liberal.

ECONOMIC FACTORS:

Currently, Airlines industry has three major players: Pakistan International Airlines, an Airblue, Aero Asia and Shaheen Airlines. Their target market includes domestic travelers as well as Pakistanis living abroad particularly in the UK and USA. These countries have strong economies coupled with high purchasing power. Customers’ purchase behavior depends very much on prices of the competing airlines as well as services offered. As inflation rate is unstable in Pakistan, spending power of consumers has effected in the long term. In fact growth in Pakistani economy has resulted in an increase in spending power and has positively impacted the airline industry.

Economically, the new millennium has been highly volatile; the September 11 attacks revolutionized the whole world. Consequently, there was a global depression in the North America, South America, Australia and Europe. However, in Asia especially Pakistan the effect in the short term was otherwise. The economy began to boom because of greater remittances from abroad and whole sum immigration by expatriates. As a result, demand for air travel in South Asia rose.

Economic conditions of Pakistan are however improving. PIA has cost a advantage over its competitors because of its newly acquired, improved, long distance aircrafts from Boeing’ which give longer range and better fuel economy than any other jet currently produced. This cost advantage is a barrier to entry for new firms. However, this cost advantage will not be significant on domestic routes.

SOCIAL FACTORS:

The social arid cultural influences on business vary from country to country. The social structure of Pakistan is closely tied. The trend is now changing as the general public is educated and is pursuing professional goals. Customers are more aware of market conditions and available options and want to get best value for their money.

They spend considerable time and money on entertainment hence increasing the need of in-flight entertainment systems. Also, word of mouth has a significant impact in the use of airline services.

Hajj attracts a huge number of customers. The social environment of Pakistan is turning liberal with the new regime. The initiative to automate check-in and ticket booking process might not be very popular with the general public (even educated population) is still technology averse.

E-ticketing might also face significant challenges as consumers are generally reluctant to provide their credit cards information over the phone and the internet. The consumers, however, have a warm reaction to the prospect of less costly but quality service flights.

vi) TECHNOLOGICAL FACTORS:

Technology is vital for competitive advantage and is a major driver of the airlines industry. Major technological changes are taking place in the airlines industry with innovations in the reservations and booking systems. In-flight entertainment systems and auto check in counters are two examples of such innovations. Internet plays a key role in e-ticketing as consumer can easily reserve tickets or check the status of the flight.

A key issue will be the extent, to which technological advancements (such as Internet) impact distribution and cost synergies from industry consolidation, can offset upward pressures on costs. PIA has always led the path of technological innovations by introducing new technologies ahead of its competitors such as its auto check-in counters which has helped it gain market share. It was the first airline in Pakistan to install Sabre system followed by the market leader.

RECOMMENDATIONS FOR PAKISTAN INTERNATIONAL AIRLINES
Decentralization:

PIA should decentralize its structure that would lead to the easy management, increased motivation, easy access to information and resolution of the conflicts (as they would be resolved by the immediate manger time span would then reduced). Since employees’ issues regarding their behavior would lessen, so it would ultimately lead to more satisfied employees that would result in enhanced productivity of the organization.

Strategic Business Unit:

PIA should make its different departments into Strategic Business Unit. Every SBU should have a defined business strategy and a manager with sales and profit responsibility.

As PIA is a large organization, so it must be convert into SBUs.Different factors should be determined for the success of SBUs which as follows. The degree of autonomy given to each SBU manager. The degree to which an SBU shares functional programs and facilities with other SBU’s

The manner in which the corporation evaluates and rewards the performance of its SBU managers

Transparent policy adoption:

PIA should adopt transparent policy that employees should be promoted on merit basis. And Chairman of PIA should be appointed from with in the organization. Union should support it, it will motivate the employees and PIA will grow in profit.

PIA should not induct new employees till the time they are needed on the basis of my personal observation at Rawalpindi station I have seen that a task which can be performed by person PIA had 3 employees for that.PIA should give bonus to the industrious and competent employees.

Employee Empowerment:

PIA should make efforts towards empowering the employees that is going to lead to more employee participation in the decision making process and also result in more employee satisfaction and enhanced motivation. Apart from this, employees would feel more independent to discuss the issues explicitly without hesitation.

This would also enhance team work process at PIA as quality team and cross-functional teams. The employees will work with more commitment and dedication and every employee would work to his/her fullest due to increased motivation.

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It was founded by J. R. D. Tata in July 1932 as Tata Airlines, a division of Tata Sons Ltd. On 15 October 1932, J. R. D. Tata flew a single-engine De Havilland Puss Moth carrying air mail (postal mail of Imperial Airways) from Karachi’s Drigh Road Aerodrome to Bombay’s Juhu Airstrip via Ahmedabad.

Air India serves 11 domestic destinations and 18 international destinations in 11 countries across Asia, Europe and North America. Air India has two subsidiaries and two affiliated carries. Together Air India, Air India Cargo, Air India Express, Indian and Air India Regional form the National Aviation Company of India Limited.

Air India Cargo

It was started in 1954. The airline operates cargo flights to many destinations. The airline also has on ground truck-transportation arrangements on select destinations. As a part of the IATA carriers Air India carries all types of cargo including dangerous goods and live animals.

Air India Express

Air India Express is the low-cost subsidiary of the airline which was established in 2005 during the aviation boom in India. It operates primarily to the Persian Gulf and South East Asia through scheduled passenger services

Indian

Indian which is based in Delhi focuses primarily on domestic routes, along with several international services to neighbouring countries in Asia.

Air India Regional

Air India Regional or better known as Alliance Air serves mainly on Regional routes. Its main hub is Delhi’s Indira Gandhi International Airport.

Tangible Assets
Fleet and Material Resources

Air India is gradually expanding its fleet. In the recent times seventeen new aircraft – eight B777-200LRs and nine B777-300ERs have so far joined the fleet and apart from this 15 Airbus A-321s and 16 A-319s have also joined for Indian operations. Air India now operates 28 weekly services on the international network to three destinations in the USA – New York, Newark and Chicago including a daily NonStop flight between Mumbai-New York and Delhi-New York following the induction of brand new Boeing 777-200LR in its fleet. With a fleet of 136 aircraft, Air India has been gradually expanding its network to cover new destinations in India and abroad. Given below are the details of the Air India Fleet:

Network

Air India currently operates international flights from Mumbai and 16 other Indian cities, viz. Ahmedabad, Amritsar, Bangalore, Chennai, Delhi, Goa, Hyderabad, Kochi, Kolkata, Kozhikode, Lucknow, Jaipur, Varanasi, Tiruchirapalli, Gaya and Thiruvananthapuram. Commencement of international operations from these cities has obviated the need for passengers from these regions to necessarily travel to Mumbai and Delhi, the traditional gateways, for taking international flights. Passengers boarding or deplaning in these cities can now complete their immigration and custom formalities at their city airport, both at the time of departure and arrival.

Additionally, Air India has code-sharing arrangements with other international carriers.

International Hub: After taking the path of consolidation during the past one year, the airline has taken a major initiative towards strengthening its global network and has restructured its operations to Europe and USA by making Frankfurt its operational hub for West-bound flights.

Indian Hub: The Indian Hub resides at Delhi & Mumbai Airports which houses facilities for connections to all major Indian cities. On the domestic front AI operates to 64 stations out of which 17 are connected to our international destinations. The 172-seater Airbus A321 aircraft connects all major metros, including all flights on the Delhi-Mumbai sector. Spacious cabin, comfortable seats and the luxury of in-flight entertainment make this a superior product that travellers look forward to.

Star Alliance

There has been a quantum jump in product profile resulting from induction of new aircraft and consequent expansion of network, Air India will be all set to join the Star Alliance by March, 2011. Once Air India becomes a member, passengers will enjoy enormous benefits, including seamless transfers while travelling across the world, more frequent flyer mileage points, code-sharing leading to a wider choice of flights and access to lounge facilities worldwide. Star Alliance, is a leading global airline alliance of 21 top international carriers. The Star Alliance network offers more than 17,000 daily flights to 916 destinations.

Human Resources

Air India has more Human Resources than it needs which is evident in the numbers employed. In 2009, 17% of the airline’s expenditure went towards salaries which is enormous comparing it with private carriers for whom it was 9.5%. The merger didn’t involve any retrenchment. Nor do any of the current recovery measures being discussed hold any ideas of reducing employee strength by huge numbers.

Air India has 31,000 employees and 14 recognized worker unions apart from which there are several unrecognized ones. While the unions say they are open to being supportive for the development of a better future for the airline, they do not support privatization of the airline or retrenchment

Apart from retrenchment, employees are also worried about the new structure adopted by the airline which they believe will work against their interests. This structure is the so-called SBU structure, one where a large organization is broken up into smaller units, each of which is run like an independent company in principle.

In Air India’s case, the problem as discussed by some senior editors & officials is that the strategic business unit structure isn’t perfect. Under this structure, a Delhi airport manager reports to his strategic business unit head, while his performance will actually be reviewed by the executive director of the northern region. Adding to this the decision on rewarding this airport manager with a foreign posting is in the hands of the commercial director, who is based in Mumbai. The officials recommend is that this entire structure be done away with and a more equitable and just system is brought into place which assures long term sustainability of the organization.

IT & Technology Resources

The IT integration between the erstwhile Air India and Indian Airlines is complete and new technology processes are put in place which are to assure high quality services to the customers. NACIL, the holding company of Air India, has entrusted SITA (Society International Telecommunications Aeronautics) with the task to implement an efficient online booking engine, departure control system, check-in and automated boarding control, baggage reconciliation system (BRS) and a frequent flyer programme. The deal which is a contract worth $190 million (Rs 845 crore) for a period of 10 years will also enable Air India to use SITA’s Horizon Passenger Services System. According to SITA, the systems implemented will make Air India step into the league of unmatched technological supremacy on the technological front primarily this includes an integrated IT platform will enable Air India to streamline its ticket distribution system and save on high distribution cost.

SITA’s Horizon platform provides hosted PSS services to 140 airlines boarding 120 million passengers and will be used to deliver a single airline code which is extremely critcial in order to allow the seamless integration of the former domestic carrier Indian Airlines with Air India for the first time since they merged in August 2007. Another early deliverable will be enabling Air India to meet the requirements for joining the Star Alliance.

SITA association with Air India with mission-critical services has been for more than 50 years, including network connectivity at all their domestic and international stations, check-in, air-to-ground communications, fares management and baggage tracing. Air India is now invited to join SITA’s Horizon Advisory Board which sets the strategic direction for SITA as it engages with Oracle and other partners to deliver a next generation Passenger Services System which will greatly benefit Air India as it exploits new technology and open systems architecture. SITA’s workforce in India along with its local partners – NIIT and Mindtree – now stands at almost 1,000 highly skilled personnel.

Low Cost Resources:
Livery

Air India and Indian unveiled their new livery in May 2007. The logo of the new entity is a Flying Swan with the Konark Chakra placed inside it. The Flying Swan has been morphed from Air India’s old characteristic logo, ‘The Centaur’ whereas the new ‘Konark Chakra’ is reminiscent of Indian’s logo.

While the aircraft is a new ivory in colour, the base retains the red streak of Air India. Running parallel to each other is the characteristically evident Orange and Red speed lines from front door to the rear door, subtly signifying the individual identities merged into one. The brand name ‘Air India’ runs across the tail of the aircraft in hindi signifying the importance of the National language.

The Maharaja

This Maharja which is now familiar figure first made his appearance in Air India way back in 1946. Bobby Kooka as Air India’s Commercial Director and Umesh Rao, an artist with J.Walter Thompson Ltd., Mumbai, together created the Maharajah. It began as an attempt as a design for an inflight memo pad grew to take Air India’s sales and promotional messages to millions of travellers across the world. Today, this iconic Maharajah of Air India has become a world figure.

The logo has completed 56 years and become the most recognizable mascot the world over. The various ads depicting his antics, expressions, puns have allowed Air India to promote its services with a unique panache and an unmatched sense of subtle humour. In fact the Maharaja has won numerous national and international awards for Air India for humour, sense and originality in publicity.

Dining

Air India is constantly trying to create a gourmet experience in its dining. The airline offers a choice of menus to interest all types of tastes – Indian and Continental. Apart from these, there is western cuisine, a choice of Asian specialities, and even Japanese meals on the India-Japan route. If any passenger has a special food requirement, there is a choice to choose from any of the twenty three special meals. The menus are constantly revamped and the wines carried on board live up to the food they complement. Meals are served in First Class seating to passengers in bone china crockery. Alcoholic beverages are served complimentary.

In-flight Entertainment

Air India aircraft are the envy of any radio station with a rich collection of music on board in different genres. Passengers can choose from Indian popular music, Indian Classical, beautiful Ghazals, Bollywood hits and English songs from Western Classical, Pop, Jazz, Country and Nostalgia. A special channel for Regional songs with different routes and demographics has been compiled to suit all passengers coming from different regions.

Air India’s video programmes include a choice of the most recent English and Hindi feature films. The finest in comedy, nature & wildlife, adventure, action and life style are wrapped in a One-hour video magazine. There are special movies in Tamil, Malayalam, etc selected for passengers travelling from Kochi, Kozhikode and Chennai to the Gulf and Singapore.

On Ground Facilities: Lounges, etc

Air India has its own exclusive lounges at Delhi, London, Hong Kong and New York in addition to the one in Mumbai. At other international airports, Air India has tie-ups with other international airlines or local Airports Authorities for lounge facility. There is a lounge for unaccompanied minors as well.

Online Booking, Web Check-in, etc

The quick, easy and convenient way to book AI tickets online through the Air India website. An e ticket will be generated and the details with the e ticket link will be emailed to the passenger. Air India has extensive facilities for Web check in and Tele check in for its passengers to provide ease of facilities.

How a country is perceived, both domestically and from abroad, from the quality of its goods and services, to the attractiveness of its culture and its tourism and investment opportunities, to its politics, economic policies and foreign policy, can be shaped under a brand.

In this section, we will focus on tourism, its impact on nation branding, its effect on GDP and the benefits of tourism branding. In the latter part of this section, we are going to analyse the tourism industries of India and Malaysia, their successful tourism campaigns, and further scope of improvement in the respective areas. We will also try to enumerate what are the major constituents of a tourism industry in any country – and their relative importance, in the two countries taken as our focus areas.

The early history of tourism tells us that people travelled from one place to another mainly because of food or shelter. But in due course of time, large scale mobility of people was caused by the natural elements of human pressure, livelihood or a better standard of living.

In the words of UNESCO, “tourism is a traditional instrument, which enables culture to be rehabilitated and made known to the rest of the world”. Tourism has become a popular leisure activity. International tourism activities have grown by leaps and bounds in the past years. With the dismantling of national boundaries, the tourism scenario is changing. There is a steady growth in the number of tourist arrivals and more satisfactorily the average spending of foreign tourist has gone up.

Tourism is vital for many countries – such as Egypt, Thailand, Malaysia and Maldives and last but not the least, India. The associated goods and service industries in these countries have sprouted to aid the tourism industry. These include transportation services, hospitality services such as accommodations including hotels and resorts, and entertainment venues like amusement parks, shopping malls and casinos etc.

It is universally accepted that government promotion of tourism is a good idea that brings excellent return on investments. It generates jobs like no other, and its development also leads to development of infrastructure, education and related industries.

However, promoting tourism successfully requires setting a context that will allow the tourists to appreciate what is on offer. THAT context is the brand or the overall image of a country.

If a country is widely viewed as secure, modern, clean and efficient, chances of getting tourists to frequent attractive destinations are good. If a nation is known for its unique features whether they be cultural, manmade or natural, there will a positive curiosity towards them encouraging tourists to discover first hand something new.

On the other hand, if a country is known for civil war, crime and corruption, inadequate infrastructure or unfriendly population, inviting tourists to your country is a mammoth task. They either require pretence of not existing, or there will be a lot of convincing to be done that it doesn’t impact the travel experience in any adverse manner.

Tourist choice behaviour is one of the most needed studies by today. Tourists take into account the various factors in terms of facilities, local attractions etc, before choosing their destination. Local attractions, accessibility, facilities are some of the factors that generate tourist flow to a particular location. Absence of any of these facilities may deter the tourists from travelling.

Hence, tourism has to be seen in totality and as comprising of its constituents – mainly attraction, hospitality and the transport facilities in the country. We are going to look at each of them in the following pages. The model that this section follows is as under:

Attractions

A tourist attraction is a place of interest where tourists visit, typically for its inherent or exhibited cultural value, historical significance, natural or built beauty, or amusement opportunities.

Attractions are the major factors, which ensure the flow of domestic or international tourists to a specific place. Some examples include historical places, monuments, zoos, aquaria, museums and art galleries, botanical gardens, buildings and structures (e.g., castles, libraries, former prisons, skyscrapers, bridges), national parks and forests, theme parks and carnivals, living history museums, ethnic enclave communities, historic trains and cultural events.

The history of attractions has often been inextricably linked with the development of travel industry in any country. It can be assumed generally that older attractions (either manmade or natural) were not designed to appeal to travellers. Some of the best examples include the Tajmahal, Niagara Falls and the Pyramids.

Most modern tourist attractions on the other hand, have been purpose-built for visitors, like theme parks or casinos. However, in the Asian context, this may differ as the attractions are generally perceived as more elaborate culture and history. The definition of attractions has been changing over time; and a few broad classifications of tourist attractions can be as follows:

Natural
Man-Made

Outdoor

Indoor

Heritage Based
Purpose Built for tourism

Special Global Events

Local Festivals/Events

Drawing Power (high)
Drawing power (low)

The growth of small local attractions has also been manifold due to an increase in the number of independent off-beat travellers. Interest in exotic destinations and wildlife has led to the development and upkeep of modern zoo’s and safari parks.

The continuing trend of increased leisure time, greater mobility and more disposable income has led to a boom in the attractions sector. Parallel attractions like theme parks have also emerged, and a number of shopping centres and waterfronts have become tourist attractions in their own right.

Culture and Tourism

Culture is a human construct, existing in representations and understanding by the people. Culture defines a society in a way which makes it different from the next.

Contemporary societies are not isolated, insular entities. There is a constant exchange of ideas, beliefs and faiths; travel and tourism undoubtedly play a significant role in this.

Culture and creative industries are being increasingly used to promote destinations and enhance their competitiveness and attractiveness. Many locations are now developing their tangible and intangible cultural assets as a means of developing comparative advantages in an increasingly competitive tourism marketplace.

People, when they visit a country or a destination or a city, are always keen to visit the sites that are important, the places of distinction, the question is always what is there to see, what is there to experience and the destinations provide further encouragement through the printed material, the information, the brochures that they provide to visitors. There are also wider benefits of developing relationship between culture and tourism – such as enhanced image and support for the cultural sector. Culture creates distinctiveness in a crowded global market.

Local communities are beginning to come together to develop cultural products for tourism rather than competing directly with one another. New policies are likely to feature new structures and projects involving public-private partnership and bringing together a wider range of stakeholders to use culture not only to make destinations attractive for visitors, but also to promote regions as destinations to live, work and invest in. Local communities are not only hosts; they define the sense of the place, providing cultural experience for tourists.

Culture in all its forms is likely to figure strongly in the tourism product and promotion of most regions, even those which have traditionally relied on their natural assets, such as sun and beach or mountains, for their attractiveness. Destinations are also trying to increase their comparative advantage by adding to their stock of cultural attractions. They are also trying to develop their intangible culture and creativity.

Culture creates authenticity and distinctiveness in the global tourism market. In this regard, “tourism experiences” that can connect people and visitors to local cultures are very important. In many cases, destinations are also linked to specific cultural events (e.g. connected to famous places, people or historical events) which can also play a catalyst role in this development.

The Cultural Heritage of India is a vibrant mosaic of lively and magnificent colours. Indian Culture encompasses a unique blend of food, fashion, festivals, dance and music that spellbound the four corners of the world in its euphoric nature. India is a popular destination and boasts a cultural heritage that is worth exploring. As a tourist one has many choices to explore – from cuisine to dances to music. All diverse in nature encompass to form the culture of India. Very few countries in the world have such an ancient and diverse culture as India’s. Dating back to over 5000 years old civilization, India’s culture has been enriched by successive waves of migration which were absorbed into the Indian way of life. The Indian culture comprises of Indian music, Indian Dance, Indian cuisines, costumes and Indian Festivals.

Internet has also become a universal tool which offers the possibility to tourists to package destinations and events with accommodation and travel.

Architecture and Tourism

Because tourism is such an enormous industry, which involves monuments, museums, and other special purpose buildings, it is not a phenomenon that can be controlled. It always stands within the cultural and political conditions of the environment, and the tastes and habits of tourists thronging a place.

Everything from historical monuments to exotic holiday destinations has been redesigned and packaged for mass consumption. As a result, the histories of specific sites have been re-conceptualized. Some have been preserved and celebrated, while others have been left to decay. Monuments like the Tajmahal or the Cellular Jail were not built for tourist purposes; however they have been converted into one now.

A more contemporary example of construction for attraction, and certainly one that is totally synonymous with its location is the Eiffel Tower in Paris. The association is incredibly strong and more amazing given the fact that Eiffel’s structure to celebrate the World’s Expo was designed for disassembly and should have come down in 1909 after just 20 years.

Possibly the biggest construction sites of all are to be found today in the Middle East – which has made huge strides to develop other sources of wealth including tourism, by constructing hotels and islands. Dubai has made the biggest splash, with the Burj Al Arab embedding deep in everybody’s psyche.

One of the best architectural tourism spots in the world is China. Chinese architecture ranging from the various dynasties that ruled it has undergone a great evolution. People recognize Chinese architecture from The Great Wall of China and the beautiful pagodas. But there is more to Chinese architecture than that. People who are interested in architecture will find China to be a virtual unexplored region which has some of the best monuments and buildings. China is a country of architectural marvels both ancient and modern and it is one of the best tourist destinations for people who love architecture. Some notable Chinese architecture that are a must see are Terra Cotta Warriors in the Mausoleum of Qin Shi Huang in Xi’an, the Hanging Temple, Forbidden City etc.

In Budapest, an eastern European country, architectural tourism has been promoted very well. Monasteries, churches, caves, Basilica etc are some well known attractions which pulls throngs of tourists here annually.

History and Tourism

Tourism is a powerful economic development tool. Tourism creates jobs, provides new business opportunities and strengthens local economies. When heritage and history is paid attention to and used to our advantage, it also helps to protect a nation’s natural and cultural treasures and improve the quality of life for residents and visitors alike.

In the past, the tourism industry saw its primary role as marketing ready products to travellers, such as package tours to Mumbai. But countries are now looking for new ways to attract travellers, and today culture and history are more likely to overlap than any other domains.

A concrete example is India, which with its potpourri of different religions and faiths, is a centre for people from countries following similar faith. Tourists from countries like Thailand, Indonesia or Burma (which follow Buddhism as well) desirous of visiting Bodhgaya are attracted to the history and heritage of the country. This can be exploited to promote history and heritage tourism – making India a lucrative destination for people sharing the same faith. Also an example is the International Kite Festival held in Gujarat every year, which is slowly turning into a big crowd puller year after year.

Cashing in on the history of a place and promoting heritage tourism refers to travelling to experience the places and activities that authentically represent the stories and people of the past and the present.

Food and Tourism

Food is something an increasing number of us remember from our travels. Like never before, holiday makers are choosing where they go by what they can put in their stomachs.

Food is a manifestation of a destination’s culture – which can be invaluable for giving travellers a hands-on experience. You can open a different door with every meal. The last few years has seen an incredible shift in the way holidays are created and marketed, and that is because people demand authentic experiences. Eating traditional dishes is considered “very important” on a holiday. People also willingly miss meals in their hotel or resort to try out local restaurants. Tourists are becoming more experimental as well as sophisticated in what they eat during a vacation.

Supermarkets have also played a major role in making foreign foods more available. Food festivals are another crowd puller. Singapore hosts an annual food festival each July celebrating a different aspect of its culture. The colourful opening of the West Bengal Tourism and Food Festival is a reflection of the state’s positive efforts to boost the tourism sector.

Indian cuisine ranges from the simple and bland to the lavish and complexly pungent. Each region has its specialty cuisine, though some dishes are available throughout the country. All the states have their own signature dishes which are world famous and tempt the tourists to visit those states, for having an authentic experience. Indian sweets and various varieties of tea, especially Assam Tea, boost tourism in India. The cooking styles and flavours of every region of India is unique and differs from each other. While Kashmir is famous for its 24-course banquet- the Wazwan; coastal Goa, Kerala and Bengal specialize in fish, seafood and coconut-based dishes. Gujarat and Tamil Nadu are the best states to taste vegetarian specialties. Bengal, Bikaner and Delhi are particularly famous for sweets.

Food tourism includes all unique and memorable food experiences, not just four star or critically acclaimed restaurants. Price is not necessarily indicative of quality. According to industry research, true food tourists are perfectly happy at a roadside cafe in the middle of nowhere, as long as there is something memorable about their visit.

Transport
Relevance

Though transportation as a topic can be discussed independently, tourism cannot thrive without travel. Transportation is an integral part of the tourism industry. It has been largely due to the improvements in mobility that tourism has expanded to such a stage.

Transportation links various cities and countries in some cases. Tourism is all about travel, and the role of transportation in its operation cannot be overemphasized. Accessibility and tourism activities have broken barriers and opened formerly off-the-beaten-track areas to visitors through aggressive marketing of some far-off paradise with the availability of transport.

It is, more often than not, seen as only that part of tourism which is in charge of bringing the tourists to their destinations; provide a means of getting around the place and leaving it once the stipulated duration is over. In fact, the transportation system of a tourist destination has a huge impact on the tourism experience which explains how people travel and why they choose different forms of holidays and destinations. Access to tourism sites relies heavily upon the state of infrastructure, and the efficiency of the public transport system.

Tourists arriving at international cities need mobility and few decide (or can afford) to hire private transport. Because of this, the public transport system is an essential service for this population, especially in cities large enough to need bus, metro and train systems. However, in congested cities with weak public transport networks, the influx of tourists exerts additional demand pressure on the transport system.

Modes Available

There are five modes of transportation, based on the physical characteristics of the service offered and the right of way over which a transportation carrier operates. These are air, highway, rail and water, arranged in decreasing order of speed. All modes of transportation are regulated in some manner, be it economic or non-economic.

Economic regulation has been reduced in a number of transportation markets in recent years, beginning with domestic airline deregulation in the United States in the late 1970s. Since then, many other countries have deregulated their national transportation systems to some degree, including air, highway and rail. Internationally, economic regulation has been reduced in some markets, with the European Union being a prime example of including not only air but other modes as well.

Passenger transportation plays a critical role in determining the success or failure of nearly every segment of tourism. Without a reliable and economic form of passenger transportation to, from and within a destination, enticing tourists to visit that destination may be very difficult. Island economies like Hawaii, Andaman Islands or Malaysia are almost fully dependent on air transport access.

Off-beat destinations

The transportation carrier may also become a “destination” in its own right, such as a few cruise liners in areas like Singapore, Malaysia, Caribbean and the Mexican Riviera. Other forms of transportation serving as “destinations” include “Palace on Wheels”, “The Orient Express” etc.

For about the past four years, the travel industry in Asia and the Pacific has been undergoing a dynamic change, and the growth of low cost carriers has been cited as the single most important factor currently shaping the region’s airline industry. Thus at the same time, tourism has also had a major impact on transport modes and networks through its ability to supply additional motivations for leisure and business travel.

Due to the intensity of worldwide competition and product parity, positioning strategies will become a strategic weapon for tourism destinations. Tourist destinations, for example resorts – which can be fairly similar, can succeed in developing strong and differentiated brands through excellent access to transportation facilities.

Transport policies and decisions of governments can play a big role in the destinations available to tourists. If the public sector does not cope with the demand in terms of transport infrastructures, tourism industry might not develop in those regions.

Hospitality

Hospitality is the relationship between guest and host, or the act or practice of being hospitable. Specifically, this includes the reception and entertainment of guests, visitors, or strangers, resorts, membership clubs, conventions, attractions, special events, and other services for travellers and tourists.

Hospitality is about compensating/equalizing a stranger to the host, making him feel protected and taken care of, and at the end of his hosting, guiding him to his next destination. Cultures and subcultures vary in the extent to which one is expected to show hospitality to strangers, as opposed to personal friends or members of one’s in-group.

The tourism industry has several components – food, accommodation, place of attractions, transportation etc. All these components are related to hospitality. Hospitality and tourism experiences have important emotional dimensions that traditional marketing tend to underplay. By understanding the hospitality-based transaction between guests and hosts, marketers and commercial operators can deliver customers experiences through which to build customer loyalty and a robust business better able to withstand. The guest and host relationship has a long tradition, pre-dating modern hospitality and tourism businesses by thousands of years and universally evident across all societies.

Hospitality creates an impression of hosting and hospitableness, which prioritizes guest experiences.

The Indian civilization is one of the oldest on earth, and like every culture has its own favourite stories including some on hospitality. That of a simpleton readily sharing his meagre morsels with an uninvited guest, only to discover that the guest is a God in disguise, who rewards his generosity with abundance. That of a woman who lovingly cooks up all the Khichdi she can afford, for everyone who is hungry… till one day when she runs out of food for the last hungry person to whom she offers her own share, and is rewarded by the god in disguise with a never ending pot of Khichdi. Most Indian adults having grown up listening to these stories as children believe in the philosophy of “Atithi Devo Bhava”, meaning the guest is God. From this stems the Indian approach of graciousness towards guests at home, and in all social situations.

Benefits of Tourism Branding

While many regard branding as simply creating a new look and tagline, if done correctly, a genuine brand management strategy should positively influence all aspects of a nation.

The reputation of the country we live in, work and study matters. An attractive and distinctive identity makes it easier for a city (and its citizens) to be preferred in any competitive setting because the place is seen to have qualities that resonate positively with key audiences and can enhance the well-being of its citizens.

We can retain different campaigns for a country. They can include exports, education, foreign trade etc. All these should contribute to a clear identity of a nation.

It is the tourism promotion – in whatever form (advertising, PR, websites etc) – that will have the biggest impact on the attitudes to a nation. Tourism is the acceptable public face of a national brand.

Clarke (2000) has identified six benefits of branding related to tourism destination products (TDPs):

As tourism is typically high involvement, branding helps to reduce the choice;

Branding helps in reducing the impact of intangibility;

Branding conveys consistency across multiple outlets and through time;

Branding can reduce the risk factor attached to decision making about holidays;

Branding facilitates precise segmentation;

Branding helps to provide a focus for the integration of producer effort, helping people to work towards the same outcome.

Impact on GDP

Focussing exclusively on India in this section – the tourism industry has contributed enormously in the flourishing graph of India’s economy by attracting a huge number of both foreign and domestic tourists travelling for both leisure and business purposes.

As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world’s attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country. India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.1 billion from April 2000 to March 2010, according to the Department of Industrial Policy and Promotion (DIPP).

According to the Travel & Tourism Competitiveness Report 2009 brought out by the World Economic Forum, the contribution of travel and tourism to gross domestic product (GDP) is expected to be at US$ 187.3 billion by 2019. The report also states that real GDP growth for travel and tourism economy is expected to achieve an average of 7.7 per cent per annum over the next 10 years. Export earnings from international visitors and tourism goods are expected to generate US$ 51.4 billion (nominal terms) by 2019. Furthermore, the sector which accounted for 6.4 per cent of total employment in 2009 is estimated to rise to 7.2 per cent of total employment by 2019.

Deeming the growing rate of the tourist’s arrival in the country, the Indian tourism industry designed a wide spectrum of holiday packages and cheaper airfares to attract more tourists. The booming success of Indian tourism industry has led to a drastic change in the hospitality department as well. The increase in the ratio of tourists resulted in the increase of room rates and also setting up of a wide range of hotels and other residing areas. The Indian tourism industry offers online booking system, one of the basic proofs of technological advancement in this sector. These online bookings are applicable for booking the air tickets via Internet by logging on to the website and also booking the hotel room of the place to be visited. The Role of Tourism Industry in India GDP also features medical tourism that includes traditional therapies like yoga, meditation, ayurveda, allopathy and other conventional systems of medicines is currently estimated at USD 333 million and is most likely to reach USD 2.2 billion by the year 2012.

Analysis of India as a preferred tourist destination

Tourism is the largest service industry in India. As we have seen in the previous section, it plays an extremely important role in the Indian economy by direct as well as indirect impact.

Countries such as USA, UK, Singapore, Thailand and Australia feature high on the list of favourite tourist destinations. Which leads us to the million dollar question – Where does India stand among other Preferred Holiday Destinations?

India is a Land of all seasons, where beauty beckons, culture echoes, diversity delights and tradition talks. Those who reach India are greeted with a gracious Namaste, Namaskaaram, Vanakkam or Sat Sri Akal denoting warmth, hospitality and respect – a tradition in tune with the country’s age-old motto “Atithi Devo Bhava” where the guest is treated as God. The Incredible India campaign focuses on the hospitality of our country, and the pristine and undiscovered lands it offers. The campaign has been running successfully for some time now, and has succeeded in pulling both domestic and international travellers to Indian destinations.

Graciously endowed with mist clad mountain ranges, deep blue seas, enigmatic deserts, golden beaches, emerald green valleys, palm fringed backwaters on the one hand and unique art forms, exciting fairs and festivals, interesting pilgrim centres, exclusive heritage sites, royal forts, majestic monuments, architectural marvels and exotic flora and fauna on the other, this legendary land is unique in all aspects – it is no wonder that India has emerged as one among the Top Five Tourist Hotspots of the world, with a tremendous increase in tourist traffic all through the year.

Many factors have been collectively responsible for boosting our country’s economic reserves and the impact of India’s economic growth on tourism is increasingly being felt in niche sectors.

India abounds in attractive and well-preserved historical sites, ancient monuments of architectural grandeur and not-so-ancient mosques/durgahs, churches and places of worship of other diverse faiths.

India is also known for some of its fine beaches like Goa, Mamallapuram, Kovalam, Pondicherry, Puri-Konark etc. In addition island tourism has been developed at Andaman/Nicobar and Lakshadweep Islands.

All across the country are wildlife sanctuaries whose areas extend over several thousands of square kilometres, where wildlife can be observed in their natural surroundings. Each sanctuary supports several species of wildlife, being well known for one particular species. In some cases, there are rare or even endangered species.

India is a land of fairs and festivals with atleast one fair in each day of the year. These fairs and festivals add colour to the social life of Indian people. Some of the important fairs and festivals are Pushkar fair in Rajasthan, Crafts Mela at Surajkund, Holi in North India, Pongal in Tamilnadu, Onam in Kerela, Baisaki in Punjab, Bihu in Assam, Dance festivals at Khajuraho and Mamallapuram etc. India has a treasure trove of handicrafts for any discerning shopper, in truly remarkable variety of styles and prices.

Over the years, India has developed world standard accommodation infrastructure for entertaining the visitors. There are about 60,000 classified hotel rooms in India and about 35,000 rooms are under construction. These hotel rooms scattered in various cities are of varying price range. Some of the major hotel chains in India are the Oberois, Taj Group of Hotels, Welcome Group of Hotels and India Tourism Development Corporation Hotels.

Despite the fact that India has a wealth of amazing places waiting to be seen and appreciated and an unbeatable tourism potential, India receives far lesser tourists compared to other relatively smaller countries.

Most foreigners who visit India for the first time are heard complaining about

Over priced Hotel rooms

Corrupt autos and taxi drivers waiting to take them for a ride, literally!

Lack of proper infrastructure

Confusion and chaos at the airport

Unhygienic conditions etc

Probable Areas of Improvement

India is well known for personal bonding and relations with their tourist customers. What will be promising for India is the effectiveness of proactive relationship building strategies undertaken by India.

India should focus on building and maintaining strong tourist relationships. It should also note that the selection and training of tour guides who are directly dealing with the tourists is undertaken properly. Accordingly, the holiday destination managers may undertake certain measures to improve the status of the dominant factors, which will ultimately lead to the improvement in visitors’ perception towards India as a tourist destination. Hence expertise and communication, and familiarity with tourists are the most effective relationship-building strategies.

The next effective strategy could be investing in

Introduction

The Emirate palace is the most luxurious hotel in Abu Dhabi being the second seven star hotel of the world. Construction of the hotel is done with the maximum possible standards of comfort and luxury. It is built in 1000 hectares of beautiful landscapes. Infrastructure of the hotel is highly commendable with all the facilities. It has 20 different places for culinary delights, vast parking place, 2 helipads, 300 rooms, 90 suits, 48 conference rooms, and a huge conference centre. The level of various services provided by the hotel is of very high quality. (Minghetti., 2003)

Some of the major services in the hotel industry are the customer services, room services, layout services, quality services etc. These services hold a great importance in the hospitality industry and even more for a hotel like Emirate Palace. Providing good customer services in the hotel industry is the most critical objective to remain competitive and profitable in the long run of the business. Customer service is a very significant facet of the hospitality industry. Customers of hotels need the employees to fulfill their various requirements and thus keep on interacting with them all the time during their stay in the hotel. (Fitzsimmons., 1999)

Tourism is an important sector of the UAE and thus the hospitality and tourism industry is flourishing and competitive there. There are a large number of hotels in Abu Dhabi which fulfils all the requirements of location, accommodation and budget of the customers. To gain a competitive edge in the market it is advisable for a hotel to work rigorously for the improvement of the customer services. Providing exceptional customer service is a very critical issue for the hospitality industry. Customers of hotels expect a good level of service from the hotel employees and if not provided than they may often feel dissatisfied but if they are given better service than the expectations they can be made feel special and important for the hotel and can make sure that during the next visit in the city they will stay in the same hotel. The main objective of good customer service is bringing the customers back. This can be done if the level of service provided to the customer is good enough to satisfy him so that he should a spread a positive feedback about the hotel that will attract more customers to the hotel. The main focus of customer services is the customer satisfaction to gain retention by making strong and long term relations. (Dominici., 2010)

Following figure show the service blueprint of a luxury hotel:

Mission and Vision of Emirate Palace

The mission of the hotel is to provide clients the most exclusive and unique experiences.

The strategic vision of the Emirate Palace is to serve as a world’s most luxurious hotel and leisure destination and to lead the industry. Another vision of the hotel is to contribute in making Abu Dhabi the centre of cultural activities of the Middle East and Emirate Palace a milestone in the country which can host any prestigious sporting event in Abu Dhabi.

Customer Services in Emirate Palace

Following are the main customer services offered in the Emirate Palace:

Hotel Reservations – Emirate Palace has a very nice facility to make reservations in the hotel. It has an online reservation portal where customer can make advance bookings for their stay in the hotel. Customer can also check the status of availability of rooms on the future dates when he wants to visit the hotel. Many online payment options are available on the website for the convenience of the customer to choose payment option which suits them the most. Reservation portal also gives many offers on the advance booking of rooms. (Dhabi.)

Meetings and Conferences – The Emirate Palace has 48 conference rooms, a large conference centre, a ballroom with a capacity of 2400 guests, a huge auditorium able to accommodate 1100 seats. These meeting and conference halls are best suitable for a gathering of 1000 people or a private confidential meeting of 10 people. The conference rooms have projectors, LCD screens, microphones, Wi-Fi data system and audio and video conference system preinstalled. (Dhabi.)

Guest Relations – Emirate Palace used to provide high level of customer service to the guests of the hotels. It is one of the most superior hotels in the world so the list of the hotel guests is also very exclusive. After getting pampered with the world class customer service the customers are welcomed to provide an honest feedback about their stay in the hotel. This feedback is helpful in maintaining long term relationship with the customers. (Dhabi.)

Membership – The hotel provides the facility of membership with the group. This membership facility is very useful in case of urgent bookings in the hotel. Members of the hotel are the customers who used to visit the hotel more often. This facility is the benefit of the long term relationship between the hotel and its customers. The members of the hotel are given priority in case of unavailability of enough vacancies in the hotel.

Comments/Suggestions – Collecting feedback from the customers is a critical issue for providing the best customer services in the industry. Words from the customers are very important for the hotel. These feedbacks are used to improve the quality of service if needed.

Transit Visas for UAE – UAE is the main place of attraction for the tourists all around the globe. Tourism is an important industry in the UAE and people used to visit UAE both for work and fun. The hotel helps its customers to provide transit visas for the UAE during their stay in the country. Acquiring visas is the most time consuming task for a visit in a foreign country. This herculean task is made easy for the customers by the Emirate Palace by providing them the transit visas for the UAE. The Emirate Palace get transit visas of 14 days issued for the customers within 7 working days. (Transit Visas for the United Arab Emirates)

Events Calendar – Schedule of the coming events in Abu Dhabi, UAE and Emirate Palace is available on the website of the hotel. This information can be very helpful for the customers of the hotel to make reservation accordingly if they want to attend a certain event in the hotel. The event calendar is used for getting information about the latest events going to be held at the hotel. (Dhabi.)

IT Butler Service – Till now the Emirate Palace used to provide a personal butler for every room and suite but now the butler service has taken a step ahead and the hotel is providing an IT butler for private consultation. This IT butler service is 24?7 facilities for IT assistance and support of the customer. Emirate Palace is used to host many conferences and workshops for many IT companies.

Online Printing – In case a customer needs printed copy of some of his document then he does not have to go to a printer to get his document printed. The Emirate Palace provides the service of online printing. The customer has to upload the electronic copy of the document on the web portal of the hotel and order it for printing. Nominal charges are applicable on printing of documents. This service adds value to the customer services provided by the hotel. (Dhabi.)

Leisure & Healthcare – The hotel has unlimited leisure and recreational facilities available. The hotel has health spa, fitness suites, energy zone, tennis and paddle programs for health and fitness of the customers. Many water sports activities are facilitated by the hotel where the customers can enjoy the thrill of the open sea. Sarab Land is a children playground well equipped with slides and swings and many child activities organized by the beach club. (Dhabi.)

Analysis of Customer Service Operations in Emirate Palace

Service operation management is all bout the process by which organization produce services which are useful for the customer. Operation management takes care of managing the process of production of services. The process of transformation of input resources in the output of services is called an operation. (JPC Media LLC )

The operation process of transforming inputs into outputs certainly adds some value (apart from the cost of input) to the final product or service which is called the value added to the service.

The Emirate Palace provides a very high level of service to its customer. This level of service can be produced only if the organization incorporates a service operation management which keeps a watch on the process of production of services. Various customer services in the Emirate Palace are discussed above and here these services are being analyzed on the framework of service operation management. (JPC Media LLC )

Hotel Reservation – In the Emirate Palace the hotel reservation system is a customer service. In the operation of this service the inputs given are the web portal for the reservation system where the queries for the availability of rooms on are asked, and information (like number of rooms, number of guests, adults or children, date of reservation) from the customer is also required. Another input is the payment options for the advance booking.

The transformation process of this service includes the changes in the database of the hotel reservation system. The database provides the results of the queries made by customer regarding the vacancy of room on the given date. The process of reservation also includes the transaction of amount for the reservation made in the hotel.

Output from the transformation process is the customer service for making advance reservations in the hotel. The process provides information about the availability of rooms or suites on the particular date when customer wants it. The process also provides the information about all the types of rooms and suites in the hotel, their specifications, facilities in the rooms, and charges of the rooms. Using this information customer can choose the type of room and services they need. After making the payments for the reservation customer can get his room booked in the hotel on the desired date. (JPC Media LLC )

Meetings & Conferences – The Emirate Palace is one of the best venues for government conference and summits. Meetings and conferences of many multinational companies are arranged at the conference rooms and auditorium of the hotel. The input in the operation of this facility are the space of the meeting rooms, gadgets like the LCDs, microphones, projectors, other services like, Wi-Fi internet, audio or video conferencing systems. These additional services act as input of this customer service. Another input is the piece of information provided by the customer about his requirements of the meeting or conference rooms.

Transformation process of the above input gadgets and services into the desired output of the service include a few steps. Conference rooms or auditorium are booked for various purposes. So first of all the requirements of the customer are studied and an estimation of the budget is given to the customer. If the customer needs any changes then the budget is revised otherwise next step that is installation of the extra facilities like Wi-Fi, projectors, LCDs are done in conference rooms and the rooms are ready and well furnished for the meetings going to held there.

Successful business meetings and government conferences and summits without any disturbance or interrupt due to some missing equipment or service are the output of this service operation. Satisfied customer is the intangible and most important outcome from the operation. (JPC Media LLC )

Guest Relations – Emirate Palace is one of the few hotels which provide seven star facilities to its customers. So the list of guests of the hotel becomes very exclusive as many government official, Hollywood stars, and sports star used to visit the hotel. The input in the service operation is the guests and the employees of the hotel.

The process of the operation involves the interaction between the customers and the employees of the hotel. Guests used to keep on communicating with the hotel staff during all the hours of the day and the response of the staff plays a crucial role in the process of transforming inputs in the desired output. The hotel staff is well trained in the field of hospitality and fulfills all the needs of the guests of the hotel.

The output of this service operation is the long term relationship with the customers. A happy guest with the facilities of the hotel will give a positive feedback of the customer services of the hotel. Apart from the positive feedback another important output will be the next stay of the guest in the hotel. Managing healthy and long term relations with the guests is important in the retention of the customers. (JPC Media LLC )

Transit Visas for UAE – Emirate Palace helps its customers in getting the temporary tourist visas of the UAE. Input for the service operation is the customer’s documents, and charges of the visa. These are the requirements for getting the transit visa for UAE for the customers of Emirate Palace.

The process of the service operation involves many steps as it has to go through a government protocol which is a bit time consuming but less than what it takes to get a transit visa directly from UAE embassy. Processing of the visa application takes at least 7 working days. The issuance of visas is under control of the Immigration department of Abu Dhabi.

Transit visa valid for 14 days from the day of arrival in UAE is the output of the transformation process. A scanned copy on the mail of the customer is sent as soon as the visa is approved. The customer can receive the original copy of the visa from the Immigration office at the UAE airport. (Transit Visas for the United Arab Emirates)

IT Butler Service – Personal butler service for each room is being provided by many hotels and is not enough for the Emirate Palace so has decided providing a perfect hospitality service according to day today’s requirements of the customers. Input in this service is the employee of the hotel who is well trained in the hospitality business and in IT skills as well.

The process of service operation is the training of the staff for the role of IT butler. They are trained to solve IT related problems of the customers.

Solution of the IT issues of the customers is the output of the operation. The IT butler helps the customers in setting up their office network, company’s VPN, or any handy issue with some technical tool or application. The IT butler is available 24?7 for the service of the customers.

Analysis of Supply Chain Management

Precisely speaking Supply Chain Management is “a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced at the right quantity, to the right location and at the right time, minimizing the cost and improving the service quality.” This definition of Supply Chain Management depicts that each and every facility plays an important role in making the product according to customers’ requirement. The supply chain in the hotel industry is used to provide the best service in the industry to the customers. The Supply chain of the Emirate Palace is designed with a certain objective of each link in the chain. Designing the right service for the customer with flexibility should be delivered to the customer in appropriate quantity, at the right time when he customer really needs it should be provided at the minimal cost. (Supply Chain Management)

In the Emirate Palace various decisions are made at times at different levels of management for the advancement in the customer services. Long term decisions are made at the strategic level. Issues like ambience of the rooms and suites, type of customer services etc are decided at the strategic level. Decisions regarding the customer services like what services to provide, how to provide, what should be cost of a particular service etc are taken at this level.

Medium term decisions like the menu of the week, theme of a particular party, other offer on services, duty of the hotel staff etc are taken at this level of the chain. The operational level is to take day to day decisions like the attire of the staff, celebrity guest of the day etc. There is a very thin line between the functions of tactical and operational level.

Inventory management and Customer service hold a trade off with each other. If the hotel staff start being very rigid with their inventory management system then they will not be able to provide the level of customer service they are providing currently. The Emirate Palace provides a very high level of customer services which will not be possible if the hotel management is more concerned about the stocks in the inventory rather than the customer satisfaction. (Supply Chain Management)

Electronic Operations at Emirate Palace

The Emirate Palace provides many services to the customer. These services are the measure of customer satisfaction with the hotel. The hotel Management use to manage most of their tasks using technologically advanced resources these operations are also called electronic operations. The major electronic operations of the hotel are the following: (Minghetti., 2003)

Reservation System

The Reservation System of the hotel is completely web based. A web portal is provided for the customers to check the availability of rooms on particular dates and make reservations if available. There the customers can also look at the images of the different types of rooms and suites of the hotel and choose one of them for their stay in the hotel. Payments are also done online via credit card and many other payment options. The payment link is provided extra web security for security reasons of the customers. Overall the reservation system of the Emirate Palace is a value added service operation of the hotel.

Online Printing

There is another facility of online printing provided for the customers of the hotel. This facility can be availed by a customer if he has a meeting early in the morning and he needs hard copies of some of his documents of which he has electronic copy. Customer can go to the website of the hotel and click on the link of online printing. Now he can upload the soft copy of his document and order it for printing. The print outs cost nominal printing charges. (Transit Visas for the United Arab Emirates)

ATMs

The electronic operations of the Emirate Palace include all the electronic services provided by the hotel. There are three ATM machines in the hotel from where customers can make transactions in case if they need cash amount.

Internet Facility

The Emirate Palace also provides internet facilities to the customers. All the rooms and suites have a Wi-Fi internet connection of 20 mbps. This complementary line is spread in all parts of the hotel. On special demand of the customers a broad line of 80 mbps Wi-Fi internet connection is provided which has additional charges.

SWOT Analysis of the Emirate Palace

Strengths

Exclusive service and features and high brand value.

Patronage of the high profile clients thus maintained profits.

Weaknesses

Extremely heavy cost of rooms so 50% rooms vacant every year.

Exclusive and the quality service cost very high.

Opportunities

Reduction in prices may attract more guests.

Threats

Another 5 star hotel Burj-Al-Arab is a major competitor.

Profits might get reduced because of the global economic melt down.

Business Process Map of the Emirate Palace

Business process mapping is a methodology to improve the performance and efficiency of the organization by improving the process steps in the delivery of product or service. The business process of the delivery of customer services in the Emirate Palace is depicted in the figure below: (Business Process Modeling)

Customer

Order for Service

Apologize for delay and ask for time.

Deliver Service to customer

Update Service & customer Database Database

Service booked for the customer

Yes

Forward order to Inventory Management

No

Check time to make available

Available?

Processing order

Check Availability

The notations of the various figures are different in the above flow chart of the business process of the.

Decision point

Activities

Actions

Events

Service Quality Management

Quality of the service is the ability of satisfying customer needs and meets his expectations consistently. It is the duty of the hotel staff and employees to provide the level of service which is up to the mark or even better than their expectations. The Emirate Palace is a seven star hotel so the quantity of customer service will be obviously large. But the quality of service they provide should be tested on various dimensions. (Dominici., 2010)

Dimensions of Quality

The dimensions of quality are:

Performance: The services provided by the hotel are very exclusive. The innovation tem of the hotel has worked hard to provide the customers with the unique customer services.

Aesthetics: Customer services provided by the Emirate Palace are very lucrative and well designed. The reservation system of the hotel is very user friendly i.e. any newbie can use the portal and book a room for him.

Special Features: Each and every customer service of the Emirate Palace has certain unique and special feature in it. Like most seven star hotels provide a private butler for every room and suites. But the Emirate Palace is providing a private IT butler for every room and suite. The job of this butler will be to help the customers with the IT related problems.

Conformance: All the customer services of the Emirate Palace are up to the mark of the expectations of the customer.

Reliability: The consistent performance of certain customer services in the Emirate Palace is doubtful. Like the IT butler service. (Dominici., 2010)

Durability: The services offered by the hotel seem to have a long useful life. All the services provided to the customers today will be also are needed by the future customers of the hotel.

The following figure shows the Gap Model of the Service Quality

Total Cost of Quality

Failure Cost: This cost of quality is the cost of defective and faulty parts of service. The failure cost of quality of the customer services will be high for the hotel. This cost is further classified in two types:

Internal Failure Cost: This is he cost when the fault in the service is detected before the launch of the service. Some employees of the hotel must have gone under training of IT skills for doing the job of IT butler.

External Failure Cost: All the cost incurred to determine and repair the fault of the service which is detected after it is offered to the customer.

Appraisal Cost: This is the cost paid to ensure that the quality of service is maintained during the use of it. Like the cost of maintenance of the database of the hotel reservation system because if the database or the system crashes then one of the most important customer service of the hotel will be finished.

Prevention Cost: This cost is paid for the training & planning of total quality, customer satisfaction, and quality improvement costs so that defect can be prevented. A separate team of innovation and customer service is always working for the improvement in the current services and remove the faults if any.

The Emirate Palace has received the Environment Management System ISO 14001: 2004 Certification of Hospitality Services.

Recommendations & Suggestions

The Emirate Palace provides a wide range of customer services to its guests. Most of these services are value added and costs pretty high for the hotel. The reservation system of the hotel is a wonderful customer services but there are some improvements required in the system so that it can be more valuable for the customers. Reservations made on the web portal cannot be withdrawn later if the customer has any case of urgency. Full amount of the payment is forfeited by the hotel. If a customer has booked a room advance in 1 month but on the day of reservation he got stuck with some important work than the instead of forfeiting the whole amount a particular percentage of the payment should be deducted and the rest should be transferred back. The process of providing transit visas of the UAE is a bit time consuming so the hotel management must try to reduce the time taken in the process.

Conclusions

The Emirate Palace is one of the world’s few seven star hotels providing excellent level of customer services. These customer services are produced by passing through various processes of service development. Operation management, process design, service supply chain strategies, and service quality management. All these frameworks and tools are helpful for the improvement of services. Developing a service involves 3 phase of giving input, process transformation, and obtaining output. Each service is the output if this process. This objective behind these high levels of services is customer satisfaction. In the hospitality industry the guests should be treated to make hem feel special. Every customer has a certain level of expectations from the service provider and if the service provided does not live up to the expectations of the customer then the customer will never come back to buy the service again. But a satisfied customer is always necessary for spreading the word of mouth about the quality of service of the business. So an organization must always vigorously strive to provide customer services to the guests so that they get satisfied and give a positive feedback of the organization.

Kedar Country Lodge

It is a four star lodge with 85 employees, its divided into different department namely Food and Beverage, Front Office, Kitchen, Housekeeping, Maintenance, Garden, Sales, Human Resources, Administration and IT. The property is 640 hectors with antelopes animals, it has Paul Kruger Museum, 65 rooms, 7 conference rooms, Restaurant and Bar. Most of their guests come to do conferencing and as well leisure.

Task 1 Staff Organization

At Kedar Country Lodge they are using Hierarchical structure, where by each department has a leader whom the junior staff report to and then they report to the operations manager then he reports straight to the general manager.

The Roles and Responsibilities of a supervisor

The supervisor at Kedar is second eye for a manager, he/she deals with staff directly. Their roles and responsibilities are as follows:

To check day to day operations
To guide and train staff
To be present all the times if there’s service
To attend to the guest’s complains
To make sure company standards and procedures are being followed
To solve conflict among staff
To motivate staff
To make sure that staff complete their jobs before they go home
To make sure that staff are safe in their working areas

The Roles and Responsibilities of a Manager

She is the one who is in charge for everything going on at Kedar property and makes finally decisions, the roles and responsibilities are as follows:

To do plans to get business
To decide the salaries of staff
To make a finally decisions on hiring
To make sure the target and goals are being reached
To maintain good communication among staff

Planning Staff Rota

The staff rota is being done by supervisors and double checked by the manager whether it’s correct. They do it according to business occupancy and there’s no favoritism. On staff rota there are only four different shifts firstly from 06:00 -15:00, secondly from 08:00 – 17:00, thirdly from 14:00 – 23:00 and lastly from 23:00 – 08:00. Staff rota helps them a lot to see who in and who off.

They are using excel to do the staff rota, on a first column they put the staff names and followed by how many days offs did the company give you, on first raw they put the number of guests in-house followed by the dates and days, at the end there’s a column of days off being owed to staff or days being owed to the company by staff. They save staff rota in computers to keep their records or for later changes. Staff is allowed to request certain days offs if they do have some appointments but it will depend how busy it will be that day. When staff rota is done it will be taken to the relevant department and put them on notice board so that everyone can see it.

The Purpose and Features of Contract of Employment

Contract of employment is an agreement between the employees and the kedar owner, it is presented in a form paper with 5 pages and if they are hiring the employee has to sign as well as the employer. It also contains the code of conducts. At kedar the employees are working during the holidays but in return they will be paid each holiday worked.

Purpose of a Contract – to define both employees and kedar owner’s responsibilities with respect to a desired development outcome to the level of detail necessary to make both comfortable with respect to the relationship and to specify rights, obligations and conditions of employment

Features of Contract of Employment

The job title and description
Which department will employee be working with
Company residential address, post address and phone numbers
To whom the employee will be reporting to
When the employee will start working
For how long is the employee on probation
The entitlements of employee (salary, leave, days off)
The rules regarding sick leave, family responsibility leave and unpaid leave
Which shifts will the employee be working

Financial and Legal Implications of Different Types of Contract

They are using the permanent or fixed term employees and casual employees.

The permanent employees – these are the employees which the company has agreed to keep them forever as long they are still willing to work for the company. They do give them the permanent contract if they have passed the fixed or probation contract for three months and if the company is happy with their performances. Their permanent staff they are entitled to:

Holiday offs – their employees are entitled to it and its either they are off or they will be paid double for each holiday worked for.

Annual leave – they give their employees 21days leave after 12 months and they will be fully paid.

Study leave – they grant them to employees who are doing part time studies when they are writing their exams. The company will give the employee the day off during the day he/she is writing and pay them full.

Compassionate leave – they give them three days off per 12 months and pay them full salary. The compassionate leave applies when the employee has to deal with emergency involving someone who depends on him/her e.g. child, husband or wife.

Sick leave – They are entitled 12 days off sick in a year, if the employee exceeds then they will subtract the days from annual leave and give them full pay. If it may happen that they have taken the entire annual leave they then notify the employee to take an unpaid leave and they won’t pay any salary to the employee.

Time off – they are entitled to off 6 days a month of which they work five and half days and get off. They will be paid full salary.

Worker’s Compensation – If an employee gets injury at work the company will pay hospital bills and pay the employee the employee full salary during those days not at work.

Casual employees – At kedar they use casual employees when it’s too busy and they pay them an hour rate. They are only entitled to worker’s compensation when they can get injured whilst working. If they use them during holiday they pay them double the amount they are being paid.

The Cost of Employing Staff

At kedar there is few cost of employing staff which are:

Time and cost to do advertising about available position
Selecting and interviewing applicants
Type of job and number applicants
To increase the space to accommodate new employees
To buy new equipment for them to use
To pay them their salaries
To feed them
To pay transport for them
To train them so that they can be more skillful and to gain job knowledge
The cost for their entitlements, .e.g. sick leave, worker’s compensation, public holidays

Motivation

It is to make someone believe in himself/herself and like what he/she doing.

The Link between Motivation and Productivity

They motivate their staff to have good productivity. They always do have competition like the employee of the month and the employee of the year, they give prize to the winner, by doing this each employee works harder in order to be a winner and on the other hand there is a good productivity and a lot of job done. There are also the prizes of name of the employee being mentioned most by guests, this makes the employees to get involved with guests or to help them more at the end the guests will be happy for good service and they will spread the word to others by doing so a lot of guests will love the place and visit more often and company gain more profits.

The Characteristics of Effective leader

They do have good leaders who are leading the company, they treat their staff like their children and they are fair, honest, responsible, trustworthy, strong, competitive and confident. They are good motivators to their employees, they are always active in planning ahead and solving any problems amongst the employees. They are good communicators, listeners and also supportive. They do train and grow them to be good leaders as well. They are mentors of their employees and they make the company to be their second home and everyone is happy. They don’t feel bored and they are patience.

An Effective Team

The way Kedar employees are you may think they are brothers and sisters, they are one and they can die for one another because of the good unit they have, the following are the characteristics which makes them a good team:

They sacrifice for each other
They have got clear common goals
They are united
They always rotate the leadership among themselves
Honest to each other
If they do have problems or conflicts they solve them in a civilized manner
They share same stories
They don’t judge or discriminate each other
They discuss or argue about work but at the end they will come to conclusion of which its normal
They all cooperate
They are free to each other

The Principles of equal Opportunities in the Workplace

They treat their staff fair and equal regardless of where are they coming from, gender, race, age, color, physical abilities, status, language and religion.

Equal Opportunities in Employment

They respect and recognize staff’s and customer’s religion and culture
The employees are happy at the workplace all times
The more skillful employees are promoted
They are fairly treated at work
Whatever decision is being made by management it is fair to all employees
They train their employees to be better so that they can deliver good service to customers
No employee is being bullied, harassed and discriminated, they are all free

Diversity

They do understand each other and they have put their differences aside, in a safe, positive and nurturing environment. Their employees are mixed; they do have foreigners, locals, mixed races (whites, blacks, Chinese and Indians), different genders (males, females, gays and lesbians) and different ages. They are one family. They do business with more different countries and all their customers they feel welcome as if they are in their countries or home because of friendly and respectful employees.

Diversity makes their company more attractive, their employees are growing and it helps with alternatives solutions when dealing with issue or ideas to grow business. It also motivates the employees. Since they have more different tribes it helps their business grow.

Purpose of an Industry Code of Ethics

A code of ethics is a vital document for Kedar, as breaches of ethics can land the company in serious trouble with consumers, other organizations or government authorities. Creating a code of ethics makes decision-making easier at all levels for them by reducing uncertainty and considerations of individual perspectives in ethical standards. It is truly a unified effort in which Kedar works to ensure there is no compromise in service, quality, or integrity

Purpose

A code of ethics guides all managerial decisions, creating a common framework upon which all decisions are founded. This helps them to create a cohesive understanding of the boundaries within an organization and the standards set for interacting with external companies. A formal, well-communicated code of ethics helps them to protect their company’s reputation and legal standing in the event of a breach of ethics by an individual employee.

Importance of Ethics

Public image
Productivity and Teamwork
Asset protection
Retain good skillful employees

Industry Code of Practice

Industry code of practice its rules or guidelines to be followed, they are there to protect their customers and Kedar owners. It makes it clear to public or customers what they are allowed to do and what is prohibited. These rules or guidelines are made by the owners to let the customers know how they run their business some by government protecting locals or internationals.

Need for industry code of practice

To deliver a certain standard of practice
To encourage consumers confidence in a particular industry
To avoid customers or owners taking advantage

Use of IT in Tourism and Hospitality

IT stands for information technology, it is the application of computers and telecommunications equipment to store, retrieves, transmits and control data, it can be people who are well trained working with those technologies. Kedar they do have their own permanently hired IT that are responsible for programming the systems, repairing and to assist with technical related issues.

Importance of IT in Hospitality Industry

To store their important information and history of previous customers
To communicate with customers via email
To market their lodge through website
To use it for checking in and checking out of the guest
To do bookings online
To do function sheets
To do staff roasters
To capture and keep records of stocks
To print necessary documents
To show the prices and customers still to pay
To show the forecast and occupancy
For guest to access internet

The following are the IT applications used from Kedar:

Computer systems – to do various different jobs, .e.g. doing emails, writing their menus etc
Aloha system – they use it to show prices of different food, beverage and to show them what has been sold when doing their stocks.(Product mix)
Reservation system – they are using room master to check in and check out their customers, it also makes it easier to check the availability and it shows how many guests are arriving, departing and staying so that the kitchen can know how many to carter for and housekeeping to know which rooms to prepare and how.
Internet – for guest to access or to do money transfer. They have made easier for their customers by having Wi-Fi.
Mobiles – managers contact the customers using mobile

Business Letters

At Kedar they write their business letters using word program from Microsoft office 2003 of which they purchased it from Microsoft company to owner it and they installed into their computers. Their business letters are straight forward. In the letter it contains contact details on the top left and underneath contains the initials of the owners. The general manager is the one who gives the finally decision, she firstly check it.

The following are some types of letters being written at Kedar:

Apologizing letters
Welcoming letters guest on their arrivals
Welcome back letters for guests who are coming for the second or third time at Kedar
Confirmation letter for booking
Quotation letters
Anniversary letters if the guests have told them prior to arrival
Birthday letters if the guests have informed them

Spread sheet

A spreadsheet is a paper sheet that shows data in rows and columns, it is mostly used by accounts doing variances to show how company does, sales department use it to show how are they doing with bringing in the clients and to show forecast, kitchen using it to keep the records of their menus and to do their menus of the week and stock controller for capturing, displaying and controlling data. They use it mostly when doing their stocks takes. The software that has this is Microsoft offices excel.

Benefits of using spreadsheet

It does have formulas to calculate
You can keep as many as you can the data on spreadsheet as long you save it
You can do the changes and save your work
It allows you to put yours inputs indifferent colors
It does have futures that allow you to control data on how you want to put it.

The Use of PowerPoint and Access Database

PowerPoint – it is mostly used by sales and marketing doing presentation to their clients, managers or human resources doing training with employees and the managers presenting what are they planning about the company to the Director, CEO and Chairman.

Access Database – they use it to store contacts of clients,

Email

Email is another way of communicating; it is done through electronic exchanging messages through the use of internet and networks.

The use of Email in Hospitality Industry

It is cheaper than using telephone, e.g.it will be to cost full using a phone for internationals than just sending an email
It can be used as a means of marketing by sending them the information booklets and special about your hotel or lodge
It is fast and efficiency

Limitation of Email

They must be careful when using humour – it is often misunderstood
Avoid sarcasm and colloquialisms
It’s not safe or private wrong people can hack
It may happen that the receiver may not have seen the email and it was urgent

Internet

Internet is a worldwide system of interconnected computer networks that use the standard internet protocol suite to link several billion devices worldwide, it carries an extensive range of information resources and services and it consists a lot of private, public, business and government packet switched networks. Internet makes it easier for marketing and doing online bookings. If there was no internet it was going to be difficult for Kedar. Internet makes it easier for them to work.