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

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

Table of contents

Introduction 4

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

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

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

Conclusion 9

References 10

Introduction

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conclusion

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

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

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

1.2 Types of Tour Operators
Outbound Operators

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

Inbound Operators

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

Domestic Operators

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

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

Direct Sell Operators

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

1.3 Current Trends and Development

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

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

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

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

1.4 Special Interest Holidays

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

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

Figure 1.1 The Holiday offer given by ABTA

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

Figure 1.2: Self catering accommodations for 2 or 3 people

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

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

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

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

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

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

ABTA: providing package for travel to Maldives

2.0 Task 2
2.1 Developing Package Holidays

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

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

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

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

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

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

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

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

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

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

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

financial planning, including the critical process of pricing holidays

sales and marketing, particularly brochure production

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

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

holiday management

customer care

account payment to suppliers

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

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

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

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

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

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

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

2.3 Costing of the Package Holiday

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

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

2.4 Major Tour Operators in UK

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

AITO (The Association of Independent Tour Operators)

AITO is one of the best tour operator in UK.

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

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

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

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

Horizontal integration provides a tour operator with:

economies of scale

increased market share

the opportunity to strengthen through expansion

The opportunity to strengthen through diversification.

Vertical integration provides a tour operator with:

economies of scale

continuation of supply

the ability to control quality

Control over distribution and merchandising.

Task 3

3.0 Brochures and Methods of Distribution

3.1 Brochures

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

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

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

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

Identify the purpose of this brochure.

Identify for which product that this brochure suits.

Identify the target audience

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

3.2 Methods of Distribution

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

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

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

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

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

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

Receiving and transmitting sales revenue to principals.

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

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

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

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

Call centers:

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

Website:

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

Internet:

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

Travel Agents:

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

Direct Sell:

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

Task 4

Strategic and Tactical Decision Making

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

Strategic Decisions

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

Forecasting demand.

Finding ways to reduce costs

Building corporate product and brand strengths.

Relationship.

Strategic linkages.

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

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

Determining the size, profile and needs of the target audience

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

Specifying brochure/Web site objectives.

Deciding the method of distribution.

Tactical Decisions

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

Vehicle technology (major innovations).

Information and communications technology.

Regulatory framework.

Price of fuel.

Economic growth or decline (national and international economy).

Exchange-rate fluctuations.

Environmental issues.

Tactical decisions includes

Focus to secure on a daily basis

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

Tactical pricing

Managing crisis

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

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

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

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

2.2 Sustainable Tourism

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

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

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

2.3 Ecotourism

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

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

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

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

2.3.1 Significance of Ecotourism

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

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

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

2.3.2 Ecotourism in Malaysia

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

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

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

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

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

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

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

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

2.3.3 Ecotourism in Penang

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

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

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

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

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

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

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

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

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

2.4 Tiger Park in other Countries

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

2.4.1 Siberian Tiger Park

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

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

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

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

2.4.2 Tiger Kingdom Chiang Mai, Thailand

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

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

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

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

2.5 Penang Tiger Park

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

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

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

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

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

Accommodation:

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

Transport Provision:

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

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

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

Ancillary Services:

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

Tour Operators:

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

Attractions:

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

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

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

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

Tourism development and Promotion:

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

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

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

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

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

Trade associations and Regulatory bodies:

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

Travel Agents:

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

Types of business travel

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

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

Incentive Travel

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

What effect incentive travel gives to the employee

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

Advantages for employees

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

Exhibitions and trade fairs

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

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

Conferences and meetings

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

Corporate events

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

Business Agencies

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

Role

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

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

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

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

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

1. Independent agencies

2. National agencies

3. Global agencies

4. Implant

5. E-agent.

Each type has its own particular characteristics and products.

Independent agencies

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

National Agencies

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

Implants

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

E-agents

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

Products and services

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

Basic services will always include:

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

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

Management of a customer’s travel expenditures

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

Negotiation with suppliers

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

Products and services provided by suppliers

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

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

TUI is one of the leading tourism industry across the Europe started since 1997. TUI is the worlds leading travel group which operates in approximately 180 countries worldwide and provide more than 30 million consumers in over 27 base markets. The employees in the TUI travel group are approximately 65,000 and operate a pan-European airline consisting of 146 aircraft. The company mainly serves the leisure travel customer and is organised and managed through four business sectors which are Mainstream, Specialist & Emerging Markets, Activity and Accommodation & Destinations. In the financial year ended 30 September 2009 TUI Travel had revenues of ?13.9bn and an underlying profit before tax of ?366m.

They are providing their services of travel and entertainment to millions of customers in different regions and as well as in different well reputed hotels worldwide. It owns travel agencies, hotels, airlines, cruise ships, retail stores, and container ships. TUI is offering their services in different and easy way through range of high street outlets and online services and as well as different travel agencies for the convenience of their customers. Therefore TUI has become one of the European well known and reputed tourism industries.

Environmental analysis:

TUI environmental analysis can be possible by using different analytical tools such as PESTEL, SWOT and Porter’s five forces. TUI environmental changes can be analysed in both external and internal to investigate how TUI achieved and maintained their leadership in the European tourism industry. However ANSOFF matrix can be useful for the TUI future implication. Furthermore, to talk about the limitations of the analytical tools is part of the report as well.

P.E.S.T.E.L analysis:

TUI external environmental analysis is done by the PEST one of the analytical tools. The PEST is used to analyse Political, Environmental, Social and technological factors of the TUI industry.

Political Analysis:

It includes range of political issues in which terrorist attacks are the major issues which enables government to put restriction on in some regions and also some insurance denied to cover their insurance if travel to these regions. These attacks also results in tight security and immigrations laws which also highly affect the tourism industry. In addition political instability not only affect the tourism industry of particular country but also many other countries nearby.

Economical Analysis:

It analyzes different and wide range of economical issues such as exchange rate, globalisation, oil prices and recession which highly affect the tourism industries. According to Galleggo et al 2007 that exchange rate plays a key role in international business and this highly impact on tourism industries for instance the difference between Pound sterling and Euro exchange rates can affect the tourism from UK into different other European Union countries. The globalisation gives many chances and very useful for international business and particularly for tourism industries to enhance them through many travel agencies and hotels worldwide. (Munoz 2005).

As discussed by Wahab and Cooper 2001 that companies have low barrier for entry to market and take over other companies so then the threat to tourism from globalisation is the tough competition and maintain the quality of the services which they provide to the customers. Porter 1980 stated that when the barrier to entry is low the competition will tough for the company in new market. Aviation and oil prices also impact on the tourism industries. The recent economic disaster is one of the causes of falling down the tourism industry but on the other hand it is a chance for other well stabled companies in market to attract customers. Although, the last economic crises report could be expected and take into account that tourism contributes 10.6% of world GDP (refer case study).

Social analysis:

This factor totally belongs to the life style and behaviour of the customers towards buying a product. Therefore tourism agencies offer a modified holiday packages and online booking services for the convenience of the customers. In additions, consumers are very responsive to environment and are more attracted to those companies who are offering better environmental policies. Another social factor is the brand awareness among the customers and majority of the customer trust in the company’s brand name hence brand loyalty can be the result of past services provided by the company to consumers.

Technological analysis:

Technology and tourism are two of the most dynamic motivators of the emerging global economy. It quite clear from the Office for National statistics 2009 that majority of even household people relying on the internet and have got the access to it. That is the reason that online sales are growing day by day. As described by Porter 2001 that internet has a low barrier of entry and online sales make it easier for customers and companies to cut down their costs by reducing staff and other intermediaries but on other hand it has a threat for the companies because newcomer can easily come into the competition. Another major threat for the tourism industry is televisions which enable people to watch different tourist places live and avoid them from travelling.

Environmental analysis:

An increased emission of carbon CO2 is a big threat and aviations and tourism industries are one of the major contributors of these emissions. The UK government is using new methods to reduce the emission to help the environment. It is a corporate social responsibility of the tourism and aviations industries to maintain their environmental responsibilities. However UK government is arguing for greener holiday locations around because these emissions can cause of many health problems for which tourism industries should be concerned.

Legal:

Companies should be responsible of the legal issues and rules and regulations of other countries if they are going to join them because international trade laws play a vital role in the today’s business world. However, government suggested aviation safety and regulations which cover up different legal issues such as environmental, health, aviations permits and customers issues.

Local Resources:

Tourism industry also affects the local resources like food, water minerals and energy which can be already in shortage.

Water resources:

Tourism industry overuses the water resources which could cause water shortage and degradation of water supplies.

Pollution:

The pollution which can take place because of tourism industry are air emission, noise, solid waste and littering.

Porter’s five forces analysis:

Porter’s five forces industry analysis helps to measure and manage the long-term survival. Michael Porter (1979) provided a framework that shapes the industry as being prejudiced by five forces.

The aims of Porter’s Five Forces framework are

To understand the drivers of competitive behavior in the sector and

To evaluate the long-run profit potential of the sector

To highlight strategies to alter industry structure (Lynch 2000)

Potential entrants:

According to Porter (1987) there is a low threat of entrant to newcomers into market. However, companies already having high shares of the market make high barrier of entrant for the newcomers because more than 70 % of the market shares are taken by the existing leaders in the market. But still the chance for the newcomers is the brand recognition which can help them as a barrier of entrant into the market.

Substitutes:

The substitutes for the tourism industry are the television program and some sort of games which can affect the business of tourism industries but on the other hand the low differentiation of products reduces the risk of substitutes because there is still lack of entertainment as compared with travelling physically.

Competitive rivalry:

Due to the tough competition in the tourism industry the companies with the fixed cost are beneficial in the current circumstances because there is a clear difference in market shares between different companies for example the TUI with 21% and Thomas Cook with 13 % of shares in the market in present which alternatively reduces competition in the tourism industry.

Bargaining power of suppliers:

Companies with low shares have low power against suppliers. But where the companies have more than 50 % of the market shares have high power of negotiation with suppliers which will be power balance in a reasonable bargaining power for the suppliers.

Bargaining power of buyers:

The low differentiation of products and less number of substitutes in the market also reduce the bargaining power of buyer it is because of the changes in online cost sales and the use of internet.

Leadership maintenance in the European tourism industry:

Porter (2006) argued that an Organisation can only sustain their leadership if they set up some differences and keep its business attractive is the way to maintain their leadership.

TUI is one of the tourism industry leading companies with the current 21 % shares of the market and offers their services almost 180 regions internationally.

The internal analysis is carried out through SWOT analysis. It is used for review the general position of the business. Strength and Weakness are the internal factors, Opportunities and Threats are external factors. The strength of TUI helped them to maintain their leadership in the tourism industry. The value chain of TUI helped them to offer cheap prices to the consumer as compared to their competitors. The direct distribution channel plays a major role to boost up the revenue and helped them to cut down expenses of TUI travel group. TUI friendly shareholders and proper management and effective customer service helped them to retain their customers and attract new customers from the market. TUI travel group believed in their differentiated product and brand name attained the competitive advantage for the organisations. TUI always considered their shareholders and employees as the assets of the organisation.

According to Grant 1991 resources and capabilities are fundamentals of strategy direction and profitability. They maintained their capacity management resources to response to the changes happening in the business environment accordingly which helped them to achieve the competitive advantage over the competitors and boosted up the economical level. This high economical scale helped them to beat the rivals in the market. The acquisitions of companies, product differentiation and cost leadership strategies helped to gain a competitive edge. In the market TUI is the one to implement these strategies all together and gained the competitive edge from their rivals in the market.

Future implications of TUI:

The usage of analytical tools such as PESTEL, Porter’s five force, SWOT analysis, Ansoff matrix the macro and micro environmental analysis has been discussed in the previous sections of the report for the TUI travel organization. TUI implemented Ansoff matrix to lead the organisation on the progressive path although TUI is one of the leading tourism industry world wide and already counted in the top leader of the European market. As explained in the previous parts of the report depending on the key finding the future implications of TUI are as published in the Mintel report (2009) that the air flight was increased by short journeys just before the economic crises which benefited the low cost airlines but not for long because the recession has changed the whole scenario. Recessions has turned the consumers to low cost and cheaper alternative such as busses and rails even though these alternatives were more time consuming but because of the recession consumers preferred to have different experience of travelling however, these preference of consumers could be a chance for TUI to enhance their differentiation of products in the form of land transportations for short journeys rather than air flight to cope with the circumstances.

Internet gives an opportunity of low barrier entrant to the newcomers’. Hence, potential entry barrier requires a high investment to enter into the tourism industry. In this situations TUI need to focus on the online services to attract the low spending consumers.

International trade can be highly affected by the fuel price instability and particularly the tourism industry therefore TUI need to deal with the oil companies to overcome this issue for specific period of time but have to take into account that this could be threat until the oil companies stabilize the fuel price fluctuation. In addition TUI needs to focus on the environmental such as the carbon emission factors which could highly impact upon the tourism industry. However, it is clear from previous part of the report that consumers prefer the companies who are aware to the environmental changes therefore TUI need to focus on the environmental changes to overcome this issue.

In the planning for the future implication, TUI should focus on enhancement of their market in the Asia but need to maintain their European market as they already one of the leading tourism industry across European market.

Limitations of the analytical tools used:

The analytical tools I have used in my report to carry out analysis of TUI and its limitations are discussed below:

PESTEL analytical tool is used to analysis both macro and micro environmental changes of the industry and recognize the main issues which can affect the strategy and analyse the threats to the tourism industry, on the other hand there are few limitations of tools used to identify the weakness of tourism industry and shape them for a solution as a result.

The aims of the Porter’s five forces are to measure and manage the long-term survival and to understand the key drivers of competitive behavior in the sector and to evaluate the long run profit potential of the sector to highlight strategies to alter industry structure (Lynch 2000). Hence the limitations are that it does not think about the other products and also ignore most important aspects such as human resource, culture and management skills.

The use of Ansoff matrix is to analyze the corporate strategic growth of the organization and assesses the best position for the organizations but on contrary it only focus on the market shares and growth and does not consider the other significant factors.

The last analytical tool used in my report is the SWOT analysis which reviews the general position of the business. Strength and Weakness are the internal factors, Opportunities and Threats are external factors. It tells about the factor to be focused and helps in the better decision making circumstances. Although, it tells about the strengths of the organisations but no effective suggestions about how to use and be benefited the organisations from them.

Conclusion:

The report examines both macro and micro environment of TUI tourism industry by the help of some useful analytical tools to find out the key factors and as well as explore that how TUI gained the competitive advantage and maintained their leadership in the European tourism industry by identifying their strength and as well as illustrate the future direction to TUI for its growth and success.

However, the recession effect the TUI in both ways when we go for disposable income, it is very true that it had affected all the industry, but the other way round although the group profit of TUI for the financial year ending 2005 has decreased compare to 2004 but in comparison of over all tourism industry TUI did well as of its competitive prices and direct selling channel i.e. internet selling which obviously reduce the operating cost by less staff working. As disposable income have badly effected the TUI but still they need to reshape their marketing structure to attract the new customers. The management of TUI need to take decision to move the company as a profit making with customers satisfaction.

Refrences:

Annual Report. (2008). TUI Annual Report.

http://www.dft.gov.uk/.

eTourism: information technology for strategic tourism management by Dimitrios Buhalis Pearson Education, 2003 – Business & Economics – 376 pages

Gallego et al. (2007). On the impact of exchange rate regimes on tourism.As ociacion Espanola de Economia y Finanzas Internacionales , 1-16

Grant, R. (1991). The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formation. California Management Review, 114-135

http://www.gdrc.org/uem/eco-tour/envi/one.html

Johnson et al. (2005). Exploring Corporate Strategy (7th Ed.). Essex: Pearson Education Limited.

Mintel Reports. (2009, July). Retrieved November 7, 2009, from MINTEL OXYGEN:

http://academic.mintel.com/sinatra/oxygen_academic//display/&id=39545

Munoz, J. (2005). Executive Insights on Globalization. International Journal of

Contemporary Hospitality Management , 17 (4), 365-371

Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press , 33-61

Porter, M. E. (1980). How Competitive Forces Shape Strategy. The McKinsey Quarterly , 34-50.

Porter, M. E. (2001). Strategy and the Internet. Harvard Business Review , 63-79.

Porter, M. (1987). From Competitive Advantage to Corporate Strategy. Harvard Business Review , 43-59

http://www.statistics.gov.uk/CCI/nscl.asp?ID

http://www.statistics.gov.uk/cci/nugget

TUI case study

http://www.tui-group.com/en/company

http://www.tuitravelplc.com/tui/pages/aboutus/corporateprofile

Wahab, S., & Cooper, C. (2001). Tourism in the Age of Globalisation. London: Routledge

ELEFTHERIA GIAKOUMOGIANNAKI T230

Taking a country or region of your choice, calculate the net propensity to travel, the gross propensity to travel and the travel frequency.

Where do the people of this country or region travel to most?

Look at the patterns of demand for tourism and explain them in respect of social, technological, economic and political factors.

Germany is a country in Central Europe. The territory of Germany covers 357,021 square kilometers. Germany has a total population 82,438,000 and as the statistics says in 2010 it has the largest population among member states of the European Union. Germany is one of the main generators of international tourism at world level. The total German tourists are 57,111,000 and according to the Eurostat statistics handbook the percentage of the population who travel is 80.7%.

Net Propensity to Travel = Total number of people who travelled/ Total Population, so the net propensity of Germany is 80.7%.

The total holiday trips by resident tourists are 153,276,000. If we want to find the gross travel propensity we have to divide the total domestic abroad by the population. So, we have 153,276,000/82,438,000=185.9% ? gross travel propensity

To find the travel frequency we have to divide the gross travel propensity by the net propensity. So, 185.9%/80.7%=2.30 ?travel frequency, this shows how many times during the year they travel.

German people according to the Eurostat statistics handbook travel most to Spain, Italy and Austria and the percentage of these travels cover the 46.2% of the total holiday trips abroad.

Patterns of demand for tourism:
Social factors

The main social trends that have influenced partaking in tourism are the increase in flexible time, its altering allocation of that time and shifts in the way that society perceives this use of time. The structure that symbolizes this is the division of the day into equal portions of work, rest and leisure activity. As the working time has been reduced, people have more time for leisure activities in general and the changing distribution of this time is also important to tourism. One of the major changes was the introduction of the two-day weekend, which was involved in making stayover tourism achievable to nearby locations. Another major change was the standardization of the annual four-week holiday. The force for such reform came not only from the labor movement but also from corporations, which realized that the labor force required more unrestricted time to obtain and consume the goods and services that they were producing.

Technological factors

The technological development in aviation industry (the introduction of new long-haul aircrafts) plays a crucial role in the diffusion of tourism. Also the development of the car industry during the twentieth century paralleled aviation in its rapid technical development and growth. Information technologies have also played a vital role in the diffusion of tourism. For example, computerized reservation systems accelerate the proceedings of travel by providing travel agencies with flexibility, incorporation with other components of the industry and enhanced cost success.

Political factors

Tourism is dependent on the freedom of people to travel both internationally and domestically. Frequently limited for political and economic reasons in the previous growth stages, freedom of mobility is seldom an issue in Phase Four countries, where limitations are more often restricted to sensitive domestic military sites and certain forbidden countries.

Economical factors

Affluence is the most vital economic factor related with increased tourism demand. Usually, the allocation and volume of tourism increases as a society becomes more economically developed and greater flexible household income then becomes available. In the early stages of development process, regular tourism participation is possible for the elite, as demonstrated by the history of tourism in Europe. ”Burton’s” Phase One refers to these pre-industrial, mainly agricultural and subsistence-based situations where there no mass participation in tourism. In this Phase only the elite travel to domestic and international destinations. In Phase Two, the generation of affluence increases and spreads to a wider segment of the population as a result of industrialization and the rapid growth of urban areas. At the same time an ever-increasing number of newly reach individuals are visiting an increasing selection of foreign destinations. By Phase Three, the mass of population is relatively affluent and the middle class becoming dominant, leading to further increases in mass domestic travel as well as mass international tourism to nearby countries. The elite turn towards long-haul travel. Finally Phase Four represents a fully developed country with widespread affluence and a following pattern of mass international tourism to a varied selection of short and long-haul destinations. Almost all residents participate in a variety of domestic tourism experiences that differ greatly from those in the earlier phase societies.

References:

Eurostat statistic handbook

Tourism Management Fourth Edition-David Weaver, Laura Lawton

1

Trends for Tourism in Europe

The European Travel Commission (ETC) has revised its document ‘Megatrends of Tourism in Europe to the Year 2005 and Beyond’ on the basis of ongoing discussions with its members – the National Tourist Offices (NTOs) of Europe – and advice from the European Travel & Tourism Action Group (ETAG), whose members comprise international organisations representing the key tourism industry sectors.

Changes in society – new ways of travel

Society changes continuously, and trends – whether economic, social or lifestyle – subsequently impact on tourism, as tourism is an integral part of our society. It is important for the tourism sector to assess these changes at an early stage. Existing policies regarding products and services, marketing and investments, all demand appropriate adjustments or adaptations when preferences and behaviour develop differently from the way they have done in the past.

In the past, supply has always dictated demand, whereas today the reverse is true. Increasing saturation of the market and more self-assertive consumers, with more free disposable income and leisure time, determine the profitability of suppliers in the tourism sector. Competition is becoming more volatile. Although some trends are supply-funded, it is also important to forecast trends in demand, as these trends form the basis for determining the time and money required to make the relevant adjustments.

In this overview, we consider trends to be future developments that differ significantly from the past – both quantitatively or qualitatively. The main objective of this analysis is to support suppliers in their longer-term policy making. The trends mentioned relate to Western society – and to Europe in particular for the next five years. They are based on various quantitative and qualitative trend analyses and assessments made by leading international tourism experts.

Finally, analysing trends leads us to the conclusion that every trend creates a counter-trend. Furthermore, it should be stressed that, in many cases, trends are mixed: Mixed in terms of their phase of development, mixed in results and mixed in the level of importance. Given this fact, it is nearly impossible to isolate tourism development into single trends alone.

Trends

DEMOGRAPHY

The number of persons in older age categories will rapidly increase. Seniors will be healthier and will have higher disposable incomes than in the past. Many of them will enjoy early retirement schemes.

In view of this development, the number of more experienced senior travellers will increase faster than the development of tourism demand in general (although a gradual downgrading of pension benefits, and a trend to increase the pensionable age may slow down this development in the long run).

Consequences for the tourism sector:

Increasing demand for quality, convenience and security.

Increasing demand for easy transportation.

Increasing demand for more relaxing entertainment facilities (e.g. golf courses etc.).

Increasing demand for one -person products.

More demand in shoulder months.

In marketing, less emphasis should be put on age and more on comfort.

The average number of persons per household will decrease still further, which will result in higher disposable incomes and spending power. For tourism, this will influence demand in general, and demand for long-haul travel and short breaks in particular.

Consequences for the tourism sector:

Increasing demand for luxury (‘small indulgences’).

Increasing demand for special products which can be obtained on impulse.

Increasing demand for city -breaks and other short breaks abroad – in periods that used to be less favoured.

Higher level of interest in winter sun holidays.

HEALTH

Health-consciousness will increase still further.

Though increasing health-consciousness will not influence the volume of demand, it will certainly influence the decision-making with regard to destinations, and behaviour during holidays.

Consequences for the tourism sector:

Destinations that are perceived as less healthy will be more quickly avoided than in the past.

The demand for sun-holidays only will decrease still further.

Active or activity holidays will increase in popularity, and the demand for facilities that correspond to this type of holiday will be increasingly preferred.

The demand for ‘wellness’ products will increase, including spas and fitness centres.
< AWARENESS & EDUCATION

The average level of education is increasing.

This will res ult in holidaymaking in which the arts, culture and history play a more important role, including more educational and spiritual holidaymaking.

Consequences for the tourism sector:

Increasing demand for special products.

The more prominent inclusion of elements relating to the arts, culture and history in package tours and self-organised holidays.

The need for better and more creative communication of information.

Demand for new destinations in Central and Eastern Europe will increase.

LEISURE TIME

Modern society exerts increasing pressure on peoples’ daily lives, and stimulates the wish for more leisure time and relaxation – which will have an adverse effect on the increase of free disposable incomes. For tourism, this trend is thus by definition unfavourable – also because the increase in the number of days of paid leave for holidaymaking has come to a halt.

Consequences for the tourism sector:

An increasing need to supply additional low-cost products.

An increasing need to offer relaxation.

A shortening of the longer main holiday in favour of more short ones.

TRAVEL EXPERIENCE

More sophisticated consumers are increasingly self-assured regarding their needs and rights.

For tourism, this results in an increasingly critical attitude to quality, and to the price-quality ratio.

Consequences for the tourism sector:

Alternative ways of spending time and money will increasingly compete with holidaymaking, and within holidaymaking the preferences for destinations and accommodation.

Destinations that do not meet up to acceptable standards will suffer more intensely, and for a longer period of time in future.

More mixed behaviour: this holiday simple, the next one luxurious – this year longhaul, next year short -haul.

Holiday preference will become more fragmented in future, and thus influence repeat volumes.

Destination fidelity will continue to decrease over the years.

More experienced tourists will increasingly result in a more critical attitude to the artificial, in favour of greater authenticity – in particular with reference to emotional satisfaction and the need to personalise; artificial supply that does not distinguish itself from others (e.g. theme parks) will decrease in importance if it does not meet with higher standards.

Experience and critical attitudes will stimulate tourists to revisit satisfactory destinations from their travel past.

The increasing preference for mobility will stimulate rentals of cars, motors and bikes.

Regions that offer a full, varied, totally balanced concept will be increasingly preferred, and will demand better destination management.

LIFESTYLES

Lifestyles in Western society change gradually.

For tourism, this influences the tourist’s perception of his/her personal needs and behaviour.

Consequences for the tourism sector:

Though relevant investments may be made, the interest in ‘Bed & Breakfast’ is lessening, since it is regarded as cheap.

As ‘status’ is less important than it used to be, leisure behaviour is becoming more personalised, leading to increased demand for smaller sized accommodation units (like smaller authentic family hotels and tourist farms).

The shift in perception regarding life and lifestyle results in a decline in the demand for fully escorted tours.

Suppliers will benefit more if they are able to create completely new products, concepts and services that distinguish themselves by their added value.

Increasing specialisation by suppliers in relation to specific hobbies and interests will become more important, and will more often be combined with holidaymaking.

The increased preference for solid ‘anchors’ as secure holds in a more uncertain world stimulates the wish to possess second homes, also in areas close to smaller regional airports.

The trend of ‘back to basics’ results in preferences for more simple holidays: from hotel to bungalow, from caravan to tent.

INFORMATION TECHNOLOGY

The penetration of the internet – and its use for information and the purchasing of tourism products and services – will continue to increase. For tourism, the role of the internet – including new means of visual presentation – will increase still further, and will prove to be of the utmost importance in future.

Consequences for the tourism sector:

The ready availability of tourist information on destinations and products, and increasingly sophisticated search engines to analyse such information will lend itself to comparison, and thus influence competition more intensively via ‘grazing’.

Experienced tourists will increasingly put together their own holidays on a modular basis with direct bookings.

The role of travel agents will decrease, as full package tours are increasingly bought directly via the net.

Internet will transform the classical role of the National Tourism Organisations (NTOs) and Tourist Boards at an increasing speed – but will create a new role in e-marketing, including the application of Customer Relation Management (CRM) destination marketing.

Destination marketing (e.g. better branding with public support) will increase in importance as the source to stimulate website visits.

The availability of in-depth information on suppliers ‘ products, either on the destination site or accessible through links, will become of more importance as the basic precondition for the success of websites.

The possibility of ‘shopping’ via the inter net will stimulate later bookings.

The growing need for secure online reservations has to be stressed in relation to more experienced and self-assured tourists.

TRANSPORTATION

The increasing availability of high-speed trains and low-cost carriers will influence classical travel flows. Road traffic will face more congestion.

Consequences for the tourism sector:

Destinations will increasingly benefit from easy and affordable access for short breaks – in particular when major events are organised outside of the main season.

The increasing availability of direct links by train and plane will stimulate demand for international short breaks in cities and city regions, to the detriment of rural areas.

The use of high-speed trains for medium distances will take over a large proportion of the travel currently undertaken by scheduled airlines.

Road congestion will negatively influence transport by private car – in particular in the high season.

Coach trips will decrease in importance.

Barriers which result from non-adapted schedules or inter-modal transportation which is not optimally connected will have a stronger negative influence on destinations that cannot meet the growing wish for easy accessibility.

Cruises – not only expensive cruises, but also those in ‘budget -class’ – will increase in popularity, in particular for those over 50 years of age.

SUSTAINABILITY

Environmental consciousness will continue to increase. For tourism, this will result in more demand for sustainable destinations, in which nature and population will play an increasingly prominent role. In order to mitigate the costs for sustainability, the price will increasingly be passed on to the tourists themselves.

Consequences for the tourism sector:

The regional component in destinations will increase in importance.

Destination management policies need to be improved through more coherent and consistent planning.

The preference for destinations will be more strongly connected to the support given by the local population to welcoming increasing numbers of visitors.

Regions which have suffered from overbuilding (particularly where this is not in keeping with the natural landscape) will increasingly be rejected as attractive destinations.

Eco-tourism should not be confused with sustainable tourism.

SAFETY & SECURITY

Acts of terrorism, regional wars, pollution and other crises have unfortunately become facts of daily life, and influence the need to feel safe and secure. In tourism, this results in an increased need for safety and security, and in tourists avoiding destinations that are perceived as unsafe.

Consequences for the tourism sector:

The quality of water (in lakes and pools, but also of tap water) will increase in importance in the selection of the destination, and demands better protection.

The more critical tourist will more quickly make claims if the product offered does not meet up to the expected standards.

The costs for guaranteeing safety and security will rapidly increase.

4. The industry should be better prepared to meet tourism demand more flexibly in periods of crisis.

The Airlines is one among the inventions that had changed the way how people live and experience the world. In due course of time it has now become impossible to imagine business and leisure travel without air travel. The airline industry exists in an intensely competitive market. In recent years, there has been an industry shakedown, which is expected to the trend towards expanding domestic and international services.

The airline industry is classified into four categories: International, National, Regional and Cargo. Airlines industry facilitates economic growth, world trade, international investment and tourism and so plays a key role in globalization making it a large and growing industry.

Air travel (both business and leisure) has grown by around 7% in the last decade. Business travel has grown as companies having global presence in terms of their investments, their supply and production chains and also their customers. Availability of aircrafts at affordable prices backed by increased tourism had led to rise in leisure travel. Overall in terms of regions in developed regions like Europe and North America a slower growth is seen when compared to developing regions like Asia Pacific.

Airlines’ profitability is closely tied to economic growth and trade. So based on the GDP growth the demand for airplanes and the air travel will increase. So during 1990-1995, the industry suffered from world recession and the air travels were further lowered by Gulf War. Thus financial difficulties impact airlines/aircraft industry. Deregulation is also stimulating competition, such as that from small, low-cost carriers.

Some of the Key terms and ratios for airline industry are listed below.

Available Seat Mile = (total # of seats available for transporting passengers) X (# of miles flown during period)

Revenue Passenger Mile = (# of revenue-paying passengers) X (# of mile flown during the period)

Revenue Per Available Seat Mile = (Revenue) / (# of seats available)

Air Traffic Liability (ATL): An estimate of the amount of money already received for passenger ticket sales and cargo transportation that is yet to be provided.

Load Factor: Measures the percentage of available seating capacity that is filled with passengers. Analysts state that once the airline load factor exceeds its break-even point, then more and more revenue will trickle down to the bottom line.

Airport capacity, technology used, structuring routes and costs to buy or lease the aircraft are very vital for the industry. In addition Weather, Fuel Cost and Labour also play an important role.

The industry has to realise the need for a radical change to sustain and also ensure growth and prosperity for their survival. Currently many cost cutting measures are being adopted in the industry.

Also to meet the requirements of customers and elevate to customer delight from mere customer satisfaction the industry players concentrate on the quality of service that they offer, both on the ground and in the air. The key challenge is to ensure meeting of customer requirements and at the same time make effective cost cutting measures and continuously being efficient and competitive and profit making.

Nevertheless, the aviation industry is characterized by strong nationalist sentiments so in many places despite globalisation airlines will face limitations on where they can fly and restrictions on their ownership of foreign carriers

10 aviation myths

More runways are essential

Environmental organisations try their best to price people off planes

International agreements make the ending of aviation’s privileged tax free status (including tax-free fuel) become impossible

The external costs of the industry are met through Air Passenger Duty (APD)

Building new runways has clear economic benefits

Aviation helps the UK tourist industry

We may be able to fulfil our international obligations with regards to climate change and still have uninhibited growth in aviation and airports

We can lessen the damage done to our environment, heritage and countryside that has been caused by aviation and airport expansion and also compensate for the same

Airports can expand and we can still meet EU air quality standards

Technology has delivered significant environmental improvements in the past and will continue to do so

Emerging Markets

The Asia-Pacific region and Middle East are the emerging markets in airline industry. They are expected to experience a higher traffic growth and expand rapidly. For better analysis please see the graph below:

Regional traffic growth (% change year-on-year): 2009 to 2012F

Note: (Data by ICAO (International Civil Aviation Organisation))

Chief Characteristics of Airline Industry

Capital Intensive: It’s a capital-intensive business which requires huge amounts of money to operate effectively. This industry requires capital for expensive equipments like aircrafts, maintenance systems, control towers, simulators etc.

Labour Intensive: Airlines need personals like pilots, crew members, security guards, cleaners, engineers etc. It’s a very labour-intensive industry and nearly 1/3rd of the revenue is used for the payment of workforce.

Thin Profit Margin: The profit margin is very thin in this industry. It averages to about 1-2% only.

Seasonal: Earlier airlines used to see a heavy load during summers (because of vacations) and a relatively lesser load during winters. The seasonal factors results in rise and fall of airline revenues over the course of the year. Over the years the seasonal effect has reduced to a greater extent.

History and the Current Scenario of the Indian Aviation Sector
Genesis of Indian Airline Industry

1932: Mr. J.R.D.Tata flies a De Havilland Puss Moth from Karachi to Mumbai as part of the first Tata Sons Ltd. Flight to deliver mail carried by British Imperial Airways

1948: Govt. of India acquires 49% stake in Tata Airlines, designated it a flag carrier and renamed it as Air India International

1953: Jawaharlal Nehru, in friendly transaction, convinces the Tata group to let the Government of India acquire a majority stake in Air India International and nationalizes air transport

1953: Indian Airlines formed by merging eight former independent domestic airlines

1960: India enters the jet age with an Air India B707. USA and India are connected for the first time with an Indian Airline

1990: East West Airlines becomes the first private airline since 1953

After 1991

1991: Private airlines were allowed to provide the service under ‘air taxi scheme’ to operate chartered and non-scheduled services.

1994: Private airlines permitted to operate as scheduled air service providers.

2003: Air Deccan lowered down the fares to 17% of previously charged rates thus introducing the concept of budget airlines in India.

Consolidation

The under-pricing of tickets due to the intense competition and the increasing number of budget carriers resulted in losses to the budget carriers as well as to the entire aviation sector. Consolidation was looked as the single way out which would lead to less competition and stable fares.

The main reason for the increasing costs and reduced efficiency and flexibility for the Indian aviation sector was poor Airport infrastructure and manpower shortages. In 2007, there were 13 scheduled carriers which was estimated that this number would fall to 8-10 by 2010 in this fragmented Indian domestic aviation sector and the estimation is almost true considering the current scenario of the aviation sector.

2007: Jet Airways announced that it would buy Air Sahara for US$500 million

2007: Air India and Indian Airlines merged into one entity named NACIL

2008: Kingfisher-Deccan deal was the third alliance in the Indian aviation sector.

Current Scenario of Aviation Industry

The Indian Aviation Industry, being one of the world’s fastest growing aviation industries, has a compound annual growth rate of 18%. There are 454 airports and airstrips in India, of which 16 are international airports. As of May 2006, private airlines accounted for more than 75% of the sector of the domestic aviation market.

The Indian aviation sector saw an increase in revenue by nearly US$ 21.4 million in December 2009 due to increase in traffic movements. Moreover, the Airport Authority of India may gain better margins in the near future as predicted by Ministry of Civil Aviation. These have been attributed primarily to the boost in the share of revenue from Delhi International Airport Limited and Mumbai International Airport Limited. According to a report released by the Ministry of Civil Aviation the number of passengers carried by domestic airlines rose from 67, 61, 000 to 80, 56, 000 for the period January – February 2009 and January – February 2010 respectively. The increase in passenger marked a growth of 19.2% for the aforementioned period. Some of the factors that have resulted in higher demand for air transport in India include the growing purchasing power of middle class, low airfares offered by budget airlines, the growth of tourism industry, increasing outbound travel from India and overall economic growth of India.

Besides this, Indian airports are being ranked among the top airports of the world. The Hyderabad International Airport now ranks amongst the top 5 Airports in the world as per the annual Airport Service Quality passenger survey. The other airports to figure in the top 5 are the ones at Seoul, Singapore, Hong Kong and Beijing. There are even talks going on between India and United States to make the country an aviation hub.

The Airport Authority of India is set to spend over US$ 1 billion in 2010, towards modernization of airports. The civil aviation ministry has also converted Delhi airport into an international hub for passenger airlines to help the airport utilize large amounts of additional capacity.

The investment policy of India in aviation industry currently allows FDI up to 100% under the automatic route for green field projects and for existing projects, FDI up to 100 % is allowed; upto 74% under the automatic route and beyond 74% under the government route.

Potential for Growth

Despite the slowdown and slow recovery, Indian Aviation industry sector still continues to look promising. This is primarily due to the burgeoning middle class with increasing massive purchasing power, low cost carriers providing services at very attractive low fares, the growth of Indian tourism and increasing outbound travel from India. In addition, the Government has planned to modernise non-metro airports, phasing out new international routes, putting into place new airports and renovating existing ones. Experts are estimating the growth of industry as high as 25% YoY.

Since 2006, most of the major Indian airline operators such as Air India, Indian Airlines, Jet Airways and Kingfisher Airlines have reported large losses, reason being high aviation turbine fuel (ATF) prices, rising labour costs and shortage of skilled labour, rapid fleet expansion, as wheel as intense price competition. Adding to all these problems are the new players entering the industry even before the existing players could stabilize their operations. As a result, all the airlines suffered even further when the recession hit.

Even then also the Indian aviation industry has been more prone to crisis as compared to their global counterparts and thus, India has the highest passenger growth rate among the entire airlines sector in the world including economies like Australia and France.

The total number of passengers travelling by air will be a whopping 400 million by 2020.” To meet with this accelerated demand, existing players need to increase fleets and broaden their reach including regional destinations as well. They are also going to get the competition from international low cost airlines like Air Asia (Malaysian) and JetStar Asia (Australian).

Flight into the future

As estimated by the Centre for Asia Pacific Aviation (CAPA), by 2011, the Indian aviation sector is likely to cross the mark of 60 million domestic passengers, whereas the total number of passengers i.e. both domestic and international is expected to cross the 100 million-mark over the next three years.

India is gearing up for heavy investments in the aviation sector of India. According to the Investment Commission of India, Investment opportunities of around US$ 110 billion by 2020 are now being predicted. It is estimated that about US$ 80 billion will go towards purchase of new aircraft and US$ 30 billion for the development of airport infrastructure.

Over the next 10 years, the Indian aviation sector will try to cash in on the potential to grow by 25% annually, as said by Praful Patel, the Minister for Civil Aviation. Also it could attract the highest investments among all the industries in India i.e. an amount up to $45 billion.

India needs improvements in services offered, huge number of skilled personnel and to stop already experiencing shortage of pilots and thereby problems like direct and indirect employment. Hence, India can look at this time to play a transforming role in this sector, as it holds great promise for development as well needed for the Indian economy to grow at a faster rate.

Major players in domestic market

Indian

Kingfisher Airlines Ltd. Full Fare Airlines

Jet Airways Ltd.

IndiGo

Jetlite

Budget AirlinesSpiceJet

Paramount Airways

Go Air

Kingfisher Red

Current Market Shares
Challenges faced by Airline Industry

1) Rising Aviation Turbine Fuel (ATF) Prices: ATF prices form about 40% of the total operating costs of airline industry. As fuel prices climb, a trend of airline stock prices going down has been noticed. The rising fuel prices make it difficult for airlines to increase profits and they are forced to increase the air fares.

2) High input costs: Input costs are high due to:-

Various taxes by State Governments and on repayment of interest on foreign currency loans taken for purchasing aircrafts due to which some airlines are under high debts .

Due to shortage of technical personnel, manpower costs are also high.

3) Decreasing returns: After the advent of Low cost carriers, the legacy carriers were forced to decrease their prices and thus profits were impacted. With the ever-increasing competition, there is a price war that is giving low returns to all airline operators.

4) Employee Management: Training, recruiting and retaining talented employees is a major concern due to shortage of skilled personnel including pilots, unionism and cut-throat competition. After- recession effects like retrenchments, salary cuts along with no-new-hiring policy, strikes by Air India and Jet Airways staff etc. has made this task even more challenging.

5) Infrastructure Upgradation: The infrastructure upgradation progress in India is far behind the western countries. While steps are being taken to upgrade major airports in Hyderabad, Delhi and Mumbai, another issue that is yet to be fully addressed is security. Proper airline scheduling and passenger handling is another task besides physical and IT infrastructure. Attracting private sector investments and implementing the planned projects efficiently is a concern.

6) Overcapacity: There has been excess capacity of aircrafts that were ordered to increase market share before the global slowdown but were delivered after the same.

7) Regional connectivity: Though there is excess capacity in some airlines, some areas are still not well connected due to poor infrastructure. The airlines have to concentrate on building remote regional connectivity other than concentrating only on metros.

8) Environmental Regulations: The carbon emission and fuel efficiency standards have to be met by technology investments and commitment. R&D on bio-fuels, that have the capacity to reduce aviation’s carbon footprint by up to 80%, needs to be carried forward aggressively.

9) Congestion: Due to increased passenger traffic and cargo growth, there has been congestion on major routes on airports like Hyderabad, Delhi and Mumbai etc. This has to be tackled effectively by either expanding capacity or creating new airports.

All this needs real strategic planning in the industry with technological innovations and best management practices.

global scenario and trends

In the past decade, travel by air has increased by 7% per year, for both – business and leisure. Large aircrafts like the Boeing 747 have made it convenient for people to travel at affordable costs. Governments in developing nations give impetus to the development of infrastructure to lure tourists from prosperous countries and add to their national economies. Besides tourism, business travel has grown considerably owing to the rapid growth of world trade in goods and services. Some airlines are owned by the state. The ones that are independent are vulnerable to economic uncertainties. Changes in the regulations of the governments and the presence of an intensely competitive market have led to many hardships in the industry

Commercial flights began within a decade of the invention of aircraft in the early 20th century. There was a surplus of aircraft and pilots worldwide after world wars I and II. DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft, the world’s first airline, was founded on November 16, 1909 with government assistance, and operated airships manufactured by The Zeppelin Corporation. Its headquarters were in Frankfurt. By the 1950s, airline companies created the framework of international travel and commerce that exists to this day.

The Airline industry is highly unionised viz. there exist multi-unions. The industry is highly regulated in terms of routes, hours of work, etc. De-regulation in US in 1978 and in Europe in 1990s and again 2007/08 has removed control of the government over fares, routes and has marked the entry of new low cost airlines in US, Europe and now India and SE Asia.

In Europe, major players like Iberia, TAP, Alitalia, KLM, Air France, Lufthansa were all once state-owned. The aviation industry is governed and set apart by strong nationalist sentiments towards a country’s domestic ‘flag carriers’. In many parts of the world, airlines will, therefore, continue to face confines on where they are allowed to fly and restrictions on their ownership of foreign carriers.

The global airline industry being high competitive has resulted in huge cumulative losses. Many airlines have either gone bankrupt or have collapsed. For example, Sabena, Swissair, Alitalia, Delta, United.

future trends

Worldwide economic activity, reflected in the global gross domestic product (GDP), is the most powerful driver for airplanes demand. The global GDP is projected to grow at an average of 3.2 percent per year for the next 20 years. Reflecting the economic growth, worldwide passenger traffic will average 5.3 percent growth and cargo traffic will average 5.9 percent growth over the forecast period.

The above graph represents the growth in the future. However, this growth can be achieved only if the surging price of fuel is controlled as it directly affect flight schedules, ticket prices and services offered. So order to survive airlines need to become more lean and mean by addressing issues like rising costs, constraints on revenue growth and increasingly dissatisfied customers.

Now we need to understand that three features are vital. That is services that give customers more control over their journeys, an infrastructure that can be easily changed to cope with variations in demand and greater collaboration among travel providers. The 5 technological innovations that can help the industry deliver the above mentioned features are

Self-service solutions: It’s a cost cutting measure but now gives the passengers the choice and control they want

Integrated baggage handling: Using IT systems and process and technologies like RFID together and thereby speed up at the same time efficiently handle the security checks for the customer’s baggage.

Shared Services: There are three levels of shared services. One is share commodity application which reduces infrastructure costs. Next is common service hosting, which allows applications to be used by the partners and other clients. Then finally traditional application hosting, which enables multiple clients to use commodity applications as per their usage rate.

Modular, flexible airport operating systems: Airports need to improve their operating systems and have a modular, flexible architecture so has to improve the efficiency and contribute to growth.

New Security Technologies: Identity management solutions like finger print matching etc. and other such improved techniques have to be employed as the threat of terrorism is growing.

Thus with all such measures we can expect a good growth in the airline industry.

Opportunities

The rise in low cost carriers and increasing disposable income of consumers with the growing population of youth working generation, especially in metros, all give rise to tremendous opportunities to the aviation industry-

1) Enhancing non-aeronautical revenue streams and Airport retailing: Revenues from vehicle parking, advertisements, shop rentals are being targeted with increased modernisation of airports and attracting international luxury brands for a 24/7 shopping experience for the customers. E.g.- New airport terminals such as the T3 in New Delhi.

2) Airport development through PPP: The restructuring of airport infrastructure for metro and non-metro airports, developing Greenfield airports by attracting large private investments is a part of government’s Eleventh Plan, where it expects an investment of around US$ 6.5 billion. This would fulfil the gaps to build world-class user-friendly airports with modern technology and provide airport capacity ahead of demand.

3) Bio-Fuels: Instead of focusing only on crafting fuel-efficient engines, manufacturers of aircraft (like being done by Boeing and Airbus),can focus on developing sustainable bio-fuels that can protect them from wavering profits due to rising fuel prices.

4) Maintenance, repair and overhaul (MRO) business: This offers high investment and business potential. An Ernst & Young report says that the MRO business in the aviation sector can absorb investments of up to US$ 120 billion 2020. Air India has signed an agreement with GE Aviation, a unit of General Electric Co. (GE), to set up a $90 million facility to maintain aircraft engines in Mumbai.

5) Private Jet market: With increasing number of billionaires in the country and the glamour quotient attached to airlines, the private jet market in India is a great business opportunity. The government is also considering permitting private airstrips in the country.

6) Heli-tourism and Commonwealth games: A major portion of visitors during the Common wealth games including spectators, athletes and coaches will travel via airlines. Tourism to various parts of India can be boosted at the same time by heli-tourism or attractive offers by airlines connecting major tourist spots.

7) Exploring alternate revenue streams:

Air Cargo operations

Ground Handling opportunities lie in offering comprehensive ground-handling solutions,3rd party handling and service contracts with private airports.E.g- AI-CIAL at Cochin

Training will be needed for pilots, airhostess, engineers, cabin crew, technicians, ground staff which is a huge business opportunity considering the demand for aviation jobs.

Internet business can be leveraged for e-ticket bookings thus saving agent commission costs and airline websites can pose as one stop shops for all travel related information thus boosting revenues.

Emergency medical services (EMS) business Eurocopter, a division of EADS which is world leader in the field of aerospace defence and related services, is looking forward to entering the emergency medical services (EMS) business in India. Leading hospital majors like the Manipal group and the Apollo group are being considered for the purpose. The company operates around 480 helicopters in India that cover both the civil and military sectors. The company also plans to increase its business area by entering the heli-tourism sector.

Travel means the movement of people between relatively distant geographical locations for any purpose and any duration, with or without any means of transport. Travel also includes relatively short stays between successive movements. Movements between locations requiring only a few minutes are not considered as travel (http://en.wikipedia.org/wiki/Travel). In other meaning, travel can be defined as a journey, a trip or a walk from one place to another place in great distance whether using any transport or without transport.

Travel can be for recreational purposes, for tourism, to visit people, for business or for commuting, and may occur for numerous other reasons, such as to obtain health care, migration, fleeing war, etc (http://en.wikipedia.org/wiki/Travel). There are many purposes of travel such as to rest and relax, to meet friends and relatives, to visit and experience new places and also to having fun and enjoying the memorable moment.

The young tourist can be defined as youth or young generation or population that age between 16 to 30 years old. In advance, young tourists were neglected by researcher because of they were always being assumed same with the rest tourist population in terms of similarities. Pastor (1991,p.7) states that ‘for too long it has been imagined that young tourists are merely more naive versions of the adult tourist, and that their needs are the same as their elders’, but on a smaller, simpler less demanding scale to be considered, in a sense, as sub-requirements’. But, actually tourist population was separated in form of age, behavior and motivational factor. Instead, it is claimed that young tourists have a distinct identity, special interests and different needs which distinguish them from adult tourists (Ravon, 1991).

This research topic was selected because we never known or never took concern about why people want to travel to overseas or in countries, what inspires them to travel and why they willing to spend their money and time merely just want to explore to other places. Furthermore, we do not have taken concern about the significant of travel, types of person that travel in context of age, behavior and inducement.

In addition, tourism industry now increasing quickly to develop and had large potential in order to be major contributor to national economy. At the same time, it can introduce the country to international era with distinctive country’s uniqueness whose can attract various type of tourist to tour. However, every interest or inducement to tour that occurs in tourists themselves are varying because there are various walks of age in tourist population. Hence, we want to study about the young tourists group on their difference of inducement and interest to tour with aged tourists group and what motivates them.

After I read all these journals, may be said that a little bit I can understand it and all the issues just now like answered. Especially, the significant or the importance of travel where it can be teaching us about the meaning of life satisfaction, open widest our mind to look the different corner of the world, know the cultural difference elsewhere which we might never known before and give us the experience to socialize and communicate with various type of people.

SUMMARY

Definition of motivation is general. There is various type of definition that can be used. According to Susan Velez (2008), motivation is the characteristic that is required in order to achieve anything in life; without it you will give up at the first sign of adversity. It is means to inspire and encourage a person to do their best towards something in their life. However, it is a slightly different with the definition of motivation in travel.

Travel Motivation: Linking Theory to Practice

For the first case study, travel motivation is a critical factor and a driving force behind tourist behavior (Crompton, 1979). The purpose of this study is to review the relevant literature on travel motivation and provides a scenario-based discussion on the applications of travel motivation theories in the industry practice (Huang and Hsu, 2009). This study was conducted by a comprehensive literature review on travel motivations that acknowledged the major theories. Two scenarios are presented and discussed by linking two motivation conceptual schemes, Maslow’s hierarchy of needs theory and Plog’s allocentrism/psychocentrism model, to practical issues in travel management (Huang and Hsu, 2009).

However, understanding tourists motivation merely imagination because it is very hard to understand different tourist’s need and wants from various age layer. It is closely related to the theory that applies in travel motivation with practices that theory into the real world. We need to study and understand totally the theory, only then we can fulfill tourist satisfaction according to age layer, their needs in travel, produce experience travel which meant for them and creating the repeat business.

Profiling Young Travelers’ Travel Behavior

According to Sung Chae (2009), the purpose of this study is to segment young travelers’ travel behavior on the basis of travel motivation. It is based on diverse needs and desires on the tourist attributes. Using oblique principal component cluster analysis, this study identified seven factors in travel motivation: Excitement, Tourist Attraction, New Experience, Relaxation, Atmosphere and Remembrance. The results indicate that the Korean young travelers’ travel behavior was varied between defined factors and different sets of socio-demographic and travel characteristics.

The information was gathered by giving the questionnaire to the subject of study. The young tourist more tend to choose vacation that give maximum pleasure, vacation to attracting places so that they would repeat the vacation to that same place, sense new experience that never felt before this, can give satisfaction of resting and relaxing without any interference and pressure, reposed in place that have atmosphere who can cause mood to revel and produce holiday that memorable forever and made as a sweet memory.

Travel Motivations and Destination Activities of Young Travelers of Different Ages: An Empirical Study in the United States

Several studies have investigated the differences in tourism and destination activities of different age groups of the travelers in the United States. Previous research studies suggest different segments of American travelers exist based upon generational groupings. The findings of the study, based upon 744 respondents, clearly identified two distinct segments of tourists in the age group of 18-23 and 24-30 in terms of travel motivation and destination activities. The results can be used by managers to improve the experience of these two distinct groups of young travelers (Michael, Dana and Dinesh, 2008). In this study, two groups of different age were focused which is generation X (born 1961-1981) and generation Y (born 1982-2000).

Through this study, found that both age group that having differences in terms of travel satisfaction, level of travel experience, motivations to travel and travel activities. After that, the result was produces where there are various factors that motivate them to travel and types of travel activities that they want. Some of the factors that motivate them to travel are the desire to travel foreign place, going to coast or island, having romantic holiday with beloved person, returning to place that we have gone before and want to spend time together with family and friends. Some types of travel activities is sightseeing, shopping, partying and celebrating and dining at special restaurant with good atmosphere and food.

CONCLUSION AND RECOMMENDATION

Based on all research paper, can be deduced that there is tourist from various age layer, gender and standard of living. Through these research papers, a little bit can understand what motivate them to travel, which age group more like to travel and what types of place they like to take a trip. Especially young tourists, they expecting the vacations that gratify most maximum, like to gain new experience or try new materials, and they feel really fortunate if they can go travel to place that all this while they wish although lack of financial resources will be cultivated also. Unfortunately, mostly of young tourists group not emphasizing security matter when travel. Not many of them want a safety vacation such as old tourists.

Especially women, because they was barer to various type of danger and threat at night time. Therefore, as a suggestion, they should take several initiatives to prevent thing that did not want to happen. Tell your family and friends on about vacation, keep map when sightseeing, do not carrying goods worth, wearing right clothes such as locals, sensitive with environment or surrounding (especially woman), avoid from dark place and always bring some small tool to defend yourself.