Lecture 2Destination Management

Dr. Petros Kosmas, Lecturer

Varna Free UniversityBA Tourism Management

Nicossia, 2011

Lecture Two

Explores the issues involved in the developmentof new attractions, including feasibility studies, financing, business planning and project management.

Summary

Development of visitor attractions

Feasibility study objectives(main ~ and additional ~)

Feasibility study contents(market analysis, site selection and funding)

Sourcing information(quantitative & qualitative research; primary & secondary data)

Factors influencing success of visitor attractions(organization and its resources, product, market and management)

Funding/financing visitor attraction projects(direct & indirect funding from private, public and voluntary sector)

Business Planning

Business Planning Introduction

The Business Plan is usually a follow-on from a Feasibility Analysis;

It incorporates information compiled for the feasibility analysis;

Establishes a clear guideline for future development of the business;

Must be seen as a working document that is used to regularly measure performance;

Business Planning Introduction

The Business Plan must be reviewed and updated as the operation grows and the business environment changes;

Is essential when financing is required,forms the core information for loan funding applications.

Often called “Action Plan” although this is just a part of the business plan

A business failing to plan, is a business planning to fail.

BusinessPlan

Implem

entation

?

Business Planning Introduction

Idea

FeasibilityStudy

Market StudySite SelectionFinancial Viability

STOP

STOP

viable?

interesting?

Why Plan?

Identify what business you are in;

To determine where you are now;

Determine where you want to be in the future- 12 months / 3 years / 5 years(clear, measurable objectives);

Identify how to get there- how do you achieve those objectives?(action plan);

Why Plan? cont.

Adapt the business to changes in the market;

Gives every person in the organization an understanding of the common objectives and identifies what the benefits are of achieving those objectives;

Gives the financiers confidence in what you are doing;

Allows a structured approach and not ‘hit or miss’.

Case Study Business Plan Outline

Business Plan Outlinecase study

The BusinessThe MarketThe Marketing Plan

- Business Objectives- Market Research- Marketing Objectives- Marketing Strategy

OperationsFinancial informationMonitoring****Provides an overview of the main headings of a business plan

Business Plan Outline“

No commonly agreed structure

Represents the main headings by concentrating on the core activities of every business enterprise

Additional headings are possible- depend on the business you are involved in and the purpose of the business plan (internal, external purposes or a mixture of …)

The scope of the business plan and the extend of every single part of the plan varies strongly

What does planning encompass?

Business is primarily about one thing only, determining what it is the consumer wantsand providing it at a profit.

Strategic positioning; Market research; Marketing strategy; Financials;Human resource management;Operational planning.

!

Strategic Positioning

Analysis of business environment:

What is the pattern of growth in your sector?

Which elements of the industry are doing well?

Is the industry easily affected by change?

Who are your competitors?

How are they doing?

Who will be your competitors tomorrow?

Are there viable substitutes for your product?

Market ResearchRecognise that the market is not stagnant

and that things change;

How can we provide a product if we do not understand what the markets wants?

Recognise that all tourism ventures are effectedby a range of issues including:economic conditions, trends, level of domestic and

international tourism, seasonality, appeal of the area, other facilities and infrastructure, resident population, local economy, attitude to tourism.

Marketing StrategyCustomer questions to consider:

Who they are?Where do they come from?What they buy?Why they buy?Where they buy from?What is the best combination of product features?

Distribution channels;Strategic relationships;Marketing Plan, actions and strategy.

FinancialsCritical part of Business Plan;

Should cover following:

Cash flow,

Projected revenue;

Pricing structure and costs,

Profit & loss projections,

Long-term capital requirements.

Human Resource ManagementRecruitment policy:

Job inquiries, resume handling, etc.;

Job descriptions: skill requirements, task outlines, performance criteria, regular review procedures;

Training and skill development:in-house, on-the-job, external;

Salary and pay management, taxation, workcover, etc.

Operational Planning

Is a critical part of the successful day-to-day operation of a tourism business;

Allows staff (and management):clear understanding of the tasks that need to be conducted to run the business efficiently;

Allows management:the ability to plan, document, review and update operational issues;

>>>

Operational Planning cont.Includes:

Operational standards & procedures;

Human resource task management;

Resource and equipment management;

Risk and emergency management;

Environmental, or sustainable tourism management.

Documented procedures do not have to be overly detailed or complex, they can be simple and still be effective.

Resource & Equipment Management

Instructions for equipment use: - setup, normal usage, cleaning, troubleshooting;

Resource management:daily maintenance, cleaning schedules – room service, restaurant setup, grounds, water, heating etc.

Suppliers and transport requirements.

(Operational requirements: staff numbers, skill requirements;)

Periodic maintenance schedules, safety checks, repairs;