Unit 11 Travel and Tourism Entrepreneurs Assignment Sample

Unit 11 Travel and Tourism Entrepreneurs Assignment Sample

Introduction

One of the largest industries which is growing rapidly because of global economic impact is the travel and tourism industry. Many cultural, political, social, economic factors affect the tourism industry both globally as well as locally. A carrier in tourism industry will always flourish because of the impact it has on the minds of people. Entrepreneurship in Travel & Tourism industry is very common along with the hospitality industry. Many opportunities for innovation of both product and process can be seen. The holiday packages, travel and accommodation services, food services are the areas in the tourism sector where entrepreneurship can be carried out. A successful entrepreneur can contribute to the economies both locally as well as globally. When funds are available for this industry, it is easy to start a business and provide good services to the people so that every process becomes easy for e.g. by online booking for tours and accommodation etc. Providing all the necessary information online and making it a user friendly interface should be the objective. Innovation in the food and beverage and hospitality services should be brought about. The concept of entrepreneur was given by Richard Cantillon (1759).

Task 1

(a) Self-assessment of entrepreneurial traits (characteristics) that you may possess and the entrepreneurial skills required to be a travel and tourism entrepreneur.

The role of an entrepreneur in travel and tourism sector deals with opening a new or working for an established tourism enterprise (Oosterbeek, Praag & Ijsselstein, 2010). Their main target is customer satisfaction. To be successful in the business an entrepreneur should have few traits as discussed below. 

• Passion: being passionate about their business is the most important trait. When extra efforts will be put in, the success of the business will bring more happiness then the wealth earned from it (Lee & Tsang, 2001).
• Discipline: this is very essential to move towards your goal as every step taken will be counted. Strict discipline will take entrepreneurs closer to their goal.
• Self-confidence: believing in one’s self is very important to bring about a change in the society. Practical and positive approach is followed by good entrepreneurs who are confident about success in the industry.
• Open minded: this attitude helps entrepreneurs to be very sharp and observe everything around them. This will help them in bringing up innovative ideas and learn from their surroundings.
• Innovation: innovative ideas are the need of the hour and good entrepreneurs always look at how things can be modified and improved in order to build a successful business.
• Competitive spirit: an entrepreneur always believes that he is the best among all and has the capability to bring about a change. Striving for the best every time is the attitude of a successful entrepreneur.
• Work ethics: ethics at the work place is very important and successful entrepreneurs are the once who come first to the office and leave last. They may also be required to work on holidays and other off days to achieve few goals.
• Excellent communication skills: entrepreneurs need to have excellent communication skills to sell their product or services and also to keep their employees motivated.
• Strong determination:defeats and failures are a part and parcel in the business and a good entrepreneur should not be affected by this and take it in a positive side. The word impossible does not exist in their dictionary (Altinay, Daniele and Gurel 2010).

The skills that an entrepreneur needs to possess in a travel and tourism industry is that they should be able to motivate themselves. Due to large amount of competition in the market, ups and downs in the business are seen regularly. This should not affect the determination of the entrepreneur and he should have a lot of self-confidence. Work ethics and morals also need to be maintained as one bad reputation might ruin the entire business. Time management is also an important criterion as every second is important and a good entrepreneur is learning every second (Baum & Locke, 2004). Improving their business is very essential and they should introduce new ways to increase the sale of their business and attract more customers to use their travel packages. While starting a business, the finance should be well understood and record of the expenditure has to be maintained. Out of the above mentioned traits and skills, I have few of the characteristics in me which would make me a good entrepreneur in the travel and tourism sector which is discussed in the next section.

(b) Rank each trait identified and the skills you possess on a 1 to 10 scale and provide a brief explanation on your judgment with some evidence.

The skill and the traits will decide how good an entrepreneur you are and how the business will progress in your leadership. On conducting self-assessment, I can say that I have the qualities in me to become a successful entrepreneur of the travel and tourism industry. In the traits listed above, the ranks which I would give to each one of them from 1 to 10 are Disciplined, self-confidence, work ethics, competitive spirit, passion, strong determination, innovative, good communication skills, open minded and finance.  Travel and tourism industry requires a lot of motivation of my fellow employees which I provide in abundance by taking them on tours and providing them incentives etc. (Putta, 2014).

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Task 2

(a) Select a successful travel and tourism entrepreneur and analyse his or her business development strategy and the entrepreneurial process

Thomas Cook was one of the most successful entrepreneur in the travel and tourism business. His travel agency Thomas Cook and Group has been successful ever since its incorporation. Thomas cook lived in a village in Melbourne, Derbyshire. At a very early age he lost his father and started working as an assistant to a gardener in the local market. He then became a preacher and distributed brochures on Baptism. As a young lad, Cook always was enthusiastic about travelling to different destinations. He was passionate about this aspect and wanted to start something of his own. When he attended a meeting in the Temperance Society, the idea of providing exclusive tours came to his mind. With the development of Midland Counties Railway, he made a plan to take a group of people to Loughborough. He later on arranged a trip for a rail company who would charge one shilling per head. Since he had mediated between the rail company and the passengers, he got some share of the money. Subsequently, he planned many excursions for the temperance society, Sunday school children and other enthusiastic adults (Shepherd, 2009). This gave him the required confidence to start his own business. He then started his own business where he organized many tours and started taking a percentage he got from the railway tickets. He was a self-confident and self-reliant person with a drive to work hard and take risks. Gradually he took up many assignments. He arranged for accommodation for a group of people travelling from Leicester to Liverpool. He then took around 350 people from Leicester to have a tour of different places of Scotland. Since he did not have much commercial and financial knowledge, some assignments got him in debt. This did not let him down. His determination and will power mage him arrange trips for more than a lakh people to attend an exhibition at London. Cook was an enthusiastic learner ready to grab information helpful to him from the surroundings. He eventual planned a tour abroad from Leicester to Calais. Later on he started his 'grand circular tours' of Europe. Seeing his positive attitude and creativity, he started a business on his own along with his son and named it Thomas Cook and Son (Burns, 2001). His office contained all the accessories required for travel, guidebooks for travellers, footwear etc. the success of the company was such that they opened many branches around the world. Below is a poster of one of the tours organized by Cook.

(b) Evaluate the success of entrepreneur's business organization.

People all around the world are very adventurous and a drive to explore more and more new places. Over the years, Thomas Cook has made the travel experience modern by understanding the needs of the customers and fulfilling their expectations. The main reason for the success of the business is the innovativeness, trust and the importance given to the customers and their needs. Nearly 20 million people prefer to travel with Thomson Cook every year and the number is constantly increasing. Our strategy to provide our customers high class facility wherever, whenever and however they wish makes us connect with the customers more closely. They provide their customers with luxury, an aspect often looked forward to by people. From the start i.e. research on tourist destinations, bookings to the complete holiday is looked at carefully in Thomas Cook. Many of its service providers have unified with them so that the combined efforts increase the overall brand of Thomas Cook (Bell and Bryman 2003). Cooks operational model also has adaptations of the local market and integrated with various other tour operators. Our online websites and many call centres answer the queries of the customers. The package variety is vast and it covers different needs of different customers.  Other services provided by them includes financial services related to travel such as currency exchange, processing the luggage at airport etc. From the beginning till now, because of commitment from the employees and hard work, the success of Thomas Cook has been high and it always maintains a place in the top 5 travel and tourism companies. The promotional strategies used by Thomas Cook are also very unique. They also give their customers promotional offers and best deals by which more number of customers are attracted to their services. Since everything is available at one place, i.e. travel, tour and accommodation, many people rely heavily on Thomas Cook.

The success of Thomas Cook is also because they give a personal approach to all their tours. They have personal interactions with their customers and make their travel moments even more special. A step wise approach is taken up for this. Initially they sent innovative and attractive mails to their customers to drive them to their package offers. With the advent of e commerce platform, the system was further improved. By this process, the company knew exactly the requirements of their customers, they send the links of those to them and this would increase the curiosity of the customers. Retargeting is another aspect on which Thomas Cook focuses on. When a customer aborts his booking midway, it is important to know the reason and Thomas cook does this by sending them a mail. Cell phones are also made use of and promotional messages are sent to the loyal customers. With large amount of data available on the website, Thomas Cook gets to know what the customer is looking at for their next destination. Therefore they provide the customers with all the necessary information. By this they increase the revenues.

Task 3

(a) Develop a brief business plan

The travel and tourism industry is responsible for organizing flights at reasonable rates, planning tours for different tourist destinations etc. for tourists. Their business plan revolves around investments from a third party, finance from stakeholders, duties and responsibilities of supervisors, promoting and advertising your product, whether targets were achieved in the stipulated time etc. The business plan should also include a thorough market research the status of your competitors and how your business will be different from them. The promotional activities and sale of the products have to be looked into carefully as deciding correct price for the product is very essential and the publicity given to it along with the effective selling plans is an important aspect. The travel agency should set an example of the changing trends in the industry. They should provide many alternatives to their customers so that they can flourish in the business (Shefsky, 1994). The factors to be considered while making a successful business plans are

• Maintaining a workbook: I will prepare a workbook of 100 pages outlining all the details of the business. Every aspect will be taken one by one and all details regarding that will be written and explained. Likewise, all point will be covered.
• Model of the business plan: I will design the business plan template having all the information. The new skills developed and the innovative ideas developed demarking me from my competitors will be included in this.
• Statistical data and graphical representation: to make my business plan visually stimulating, I will use charts and graphs to depict all the industry related data. All my creativity will be put in this process.

A brief outline of my business plan is as below:

Firstly I will describe the concept of my tourism business. It expertise lies in providing the best and first class cervices to the customers and the goals that I have set for future, i.e. to become one of the top travel and tourism businesses. I will identify the potential market for my business and aim to expand it. The target customers are the once who travel very regularly and have an eye for adventure. My company will also try to attract customers who often are on a look out for tours at affordable cost. I will ensure that tours are organized for all economic classes so that everybody remains satisfied. Providing the best in the amount spent would be one of the objectives as only then the customer is happy and have no regrets about the money spent on the tour. The main mission of my company is to connect strongly with the customers who come to me, understand their requirement and expectations and try to meet them at the earliest. The location where the company is located is also important. I will ensure that my company is located at the place which is easily accessible for all so that a visit will clarify all their queries. Also I will develop a user friendly web interface where all the details are readily available. I will appoint sufficient staff to meet the objectives of the company and train them accordingly (Easterby-Smith, M. et al, 2008).

(b) Describe your niche travel and tourism business concept, product/service characteristics, market potential, business analysis and operational plan

Business in tourism is always a fast growing market and the largest business sector. The business concept which I plan for my travel and tourism company will be to ensure all factors which will give the best service provision to all customers. For this, I will ensure that the hotel with is linked with my company will have a policy of 24hrs check in and checkout option. This will be convenient for general public as well as people on business tours. Providing the customers with the best in class features in the airline as well as the hotels will be the main objective such as providing access to internet, TV etc. many a times it so happens that the transit time from boarding one flight to the other is so long that the passengers get bored. My company will collaborate with the concerned airports in the target areas and arrange a package having one hour sightseeing so that the passengers remain entertained. This increase and attract many more. The main operational plan for my company is to make use of the latest technologies. I plan to promote my business on the internet. All aspects such as the world class modern facilities, added recreational activities, and the quality of the service provided; the cultural and traditional attraction will be covered. Online booking facilities for booking of airlines, taxis, hotels will be made a click away on our website. Electronic ticketing is the most preferred mode of carrying tickets now a days and this will be made available to all customers. Alliances with different service providers also help in streamlining the tour. The security of the customers is also a very important criterion and in my travel company I will train the staff so that security is provided to the customers, most importantly to the female customers (Poschke, 2013). The market potential of my company will be at par of the expectation i.e. it will give tough competition to the competitors. The operational plan to be at the top of the business will be achieved in a period of two years. The present scenario of the business is that it is gradually growing and with the innovative ideas, it will give sever competition to the people in the market. The main target customers are the people who travel extensively and routinely. This could be youngsters or people on a business tour. When they are satisfied with the services, they are bound to come again and at the same time they spread a good word about the business to their friends and relatives. Trekking enthusiasts also expect a reasonable deal while they are travelling and hence my company aims to provide them affordable packages with good offers.

(c) Financial projection and a brief cash-flow analysis

Financial projection is very important to meet the aims and goals set by the company. Good growth is observed when financing is done and there is continuous cash flow. The terms of payment are agreed mutually between the customers and the company. Therefore there is a sense of respect between the company and the customers and a healthy relationship is maintained. The continuous flow of cash would be the first priority; growth of the company would be second and third is the profit (Shane, 2003). There are certain assumptions that I make before setting a financial plan, they are, that we won’t face any recession and the economy would be strong. Also, an assumption is made that there won’t be sudden changes in economic policies which would impact my travel and tourism business in a big way. According to my estimates, my tour and travel company will do well gradually and will increase the sales. This will be done because of the marketing. Early investment is very necessary for my company to flourish. The growth projections for the travel company should be accurate and the conditions should be economic for the travel industry. Even break analysis is assumed to be 20% of the gross margin and this will increase gradually. Below is the chart showing sales, gross margin % and operational expenses as key financial indicators. By studying the graph, growth is expected in sales which in turn proportionately increase the operating expenses.

The projected profit and loss is as shown below and gradual increase is seen with the maximum being in third year.

The cash flow analysis plays an important role in the success of my tour and travel organization. The following graph shows the analysis and comparison of the net cash flow and the cash balance for every month of the year (Anderson, Warren 2011).

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Conclusion

Entrepreneurship is no so easy and it may seem to be and a successful entrepreneur has many challenges to face in order to be successful. There is a lot of potential for starting a business in the travel and tourism sector but it has many challenges as well. High competition is seen in the market. With the advancement in internet and online booking facilities, things have become much easier. The aim of a successful entrepreneur is bring about innovativeness in the business which will make him stand out from the crowd of tour and travel companies. Having a business plan well though will be very helpful for the company which is a start-up. An entrepreneur should have a clear idea about the concept of the business, operational plan, marketing strategies etc. In the present case study, the entrepreneurship qualities of Thomas Cook is studied and how his qualities have helped his company, Thomas Cook and group to flourish and to become one of the leading travel and tourism company.

References

Altinay L, Daniele R, Gurel E 2010, Tourism students' entrepreneurial intentions, Annals of Tourism Research
Anderson AR, Warren L 2011, The entrepreneur as hero and jester: Enacting the entrepreneurial discourse, International Small Business Journal
Baum, J. R., and Locke, E. A. 2004, The relationship of entrepreneurial traits, skill, and motivation to subsequent venture growth. Journal of applied psychology, 89(4), 587.
Bell, E. and Bryman, A 2003, Business Research Methods, 2nd Ed, New York: Oxford University Press.
Burns, P. 2001, Entrepreneurship and Small Business , 2nd Ed, New York: Palgrave Macmillan.
Easterby-Smith, M. et al 2008, Management Research, 3rd ed. London: SAGE Publications Inc.
Lee, D. Y., and Tsang, E. W. 2001, The effects of entrepreneurial personality, background and network activities on venture growth*. Journal of management studies, 38(4), 583-602.
Oosterbeek, H., van Praag, M., and Ijsselstein, A. 2010, The impact of entrepreneurship education on entrepreneurship skills and motivation. European economic review, 54(3), 442-454.

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