Tourism Business Management - Coursework Example

Small Business Management Student’s Name: ID Number: Course: Date: Operation Report on Tourism Business Feasibility Study Introduction Hospitality business is one of the viable opportunities for investment these days. Interest in travel and touring has been growing across the world (Smith, 2012). Young people always want to tour various places for leisure and study purposes. In this case, they travel to different places with an aim of conducting research on various issues. Working class people also have a habit of saving money with an aim of travelling overseas during holiday seasons (Witt, Brooke, & Buckley, 2013). Besides, people in retirement also want to enjoy life through travelling to different destinations across the world. In this way, they get to experience life outside their country during final stage of life. Due to this growing interest, demand for hospitality services is also becoming high (Frechtling, 2012). As the people travel around the world, it is important to note that they spend a lot of money in exchange of various services. Such activity implies that there is viable opportunity for investment. As travel interest increase, the demand also increases hence there is need for investing in this industry in order to satisfy the growing demand (Aldebert, Dang, & Longhi, 2011). An investor may opt to invest in hotels, transport or offering tour guide service to visitors. There are a lot of opportunities in this industry where people can invest and realize good returns (Goodall, & Ashworth, 2013). However, such investment calls for management skills and reliable information concerning the industry. Such skills enable the investor to run the business smoothly while the information helps in ensuring total compliance with regulations as well as strategic planning. This paper provides general information on venturing in hospitality sector in coastal region of East Africa. Industry Description The small business falls under tourism industry. Currently, there is diverse interest in tourism whereby people travel for different reasons. Initially, people used to travel for leisure hence most investors concentrate in providing leisure-related services (Ghimire, 2013). The trend is taking a new dimension these days with increasing number of visitors with the aim of conducting research. Scholars in developed economies are becoming highly interested in looking for first-hand information about different issues concerning developing nations. They no longer rely on internet sources hence prefer coming themselves and spend time while conducting research (Kozak, & Martin, 2012). Various institutions of higher learning are also engaging their resources in research and development. They send their researchers in different parts of the world including Eastern Africa to carry out specific study. Some of the key driving forces in this particular investment include growing interest in research for both government agencies and higher learning institutions, sufficient budgetary allocation, increasing relevance of developing economies in developed nations and affordability of research and development activities. Current economic trends such as increasing influence of China and India in Sub-Saharan Africa is attracting the attention global economic researchers. Such aspect also contributes significantly to increasing rate of visitors from developed economies such as Europe and United States. They provide an opportunity to invest in this industry. Flow of such kind of visitors is expected to increase in future. Higher learning institutions are still campaigning for huge allocation of funds for research. Due to this, scholars still want to travel and seek information that aids in compiling report and data in the process of conducting studies (Sharpley, 2011). Local universities particularly in East Africa region are also becoming interested in education travels in order to raise standards of their study curricula. Inter-governmental cooperation in research and other development issues also gives hope for a better future in this investment. Governments are becoming more aware of the need to unite in carrying out studies that might help them develop economically and socially. In this respect, they fund research projects which take place on the ground and not in offices. Researchers visit local villages with an aim of extracting necessary information from the people (Ritchie, Tung, & Ritchie, 2011). Most of these activities take place in potential areas that still lag behind economically. Different agencies still want to establish why these areas are underdeveloped while possessing sufficient resources. Such factor is a reliable reason to believe that the business has a brighter future (Moutinho, Ballantyne, & Rate, 2011). There is increasing long-term demand for customized hospitality service for this kind of tourists. Product/Service Description The small business aims at providing variety of services to the target market which is local and foreign visitors on education and research mission. Services include provision of accommodation, local meals and drinks, tour guide and conferencing facilities. These are services every researcher demands from the provider thus enabling him to carry out his mission successfully (Sharpley, 2011). All of them are designed purposely to facilitate smooth research activities as well as ample learning atmosphere for both scholars and government delegations. Services are different from those for tourists on leisure and holidays although some aspects are similar. The researcher requires ample accommodation especially free from noise and any form of interruption. Comfort is a key element in this case since the visitor is always tired during the night due to day’s activities. There is need for mental relaxation in order to gather strength for the following day as well as meditate on day’s events and findings. In this case, the facility is located in serene environment and each room has noise-absorbers to enable the occupant peaceful time during the night. Foreign visitors like having a different experience especially when touring African continent. Providing local traditional meals and drinks goes well with them (Kozak, & Martin, 2012). In this case, fresh farm produce that are highly nutritious are part of visitors’ interest. It ensures that they have an exciting taste different from what they take while at home. However, it is important to ensure different varieties are available. Visitor chooses the meal depending on what he or she would wish to have. Variety of drinks also makes the meals complete hence necessary to provide them always. Availability of effective tour guide is essential in making the visit successful. Note that this kind of tourism is different from others since visitors always have targets to meet. They also have time limit for the research or other learning activities. It is important to ensure that the person in charge of tour guide is familiar with local environment and other issues (Ghimire, 2013). They usually need someone to take them in different places and assist them get whatever they need during field work. Such assistance helps them achieve their target efficiently thus making their mission successful. Researchers usually work as a team especially when they come from universities and other institutions. In such case, they require conferencing facilities where they can handle consultative meetings before and after field activities. It is important to ensure availability of essential equipment and facility in conference room. In most cases, they may require to report back whatever they do back at home. Availability of efficient internet and computers in the room is essential. Such facility is one of the key aspects that determine success of learning process or research activity. There is no need for visitors to come with their computers from home countries. It is important to provide them with these tools to make them trip successful. Note that these services are different from others provided to visitors on holiday tours. Most investors in this industry concentrate on merry makers and holiday tourists. Foreign and local scholars and government delegations on study mission have been ignored for many years. Providing special products for students and researchers is a vital step towards developing the industry. Visitors on holiday do not require conferencing facilities since they just want to relax and have fun throughout. It is important to venture into the business of providing particular services for research scholars and delegations only. Very few have ventured into this segment hence high demand for the service. Business Operations Plan Operations Objectives and Competitive Advantage The small business aims at facilitating smooth research and study missions in the horn of Africa. To achieve this, it provides ideal atmosphere for institutional research teams hence enabling them to realize their goals. The business provides basic tools and facilities necessary for such missions. In respect of this, it plays a crucial role in enabling institutions of higher learning and other agencies to achieve their overall goal. Such investment is a key aspect towards both academic and economic development. Scholars have ample time to conduct research hence succeeding in academic endeavors. In addition, both governmental and non-governmental research agencies have the opportunity to do research activities in a suitable environment hence achieving their goal. In a nut shell, as the business gets revenue from target customers, it also contributes towards their success. Most tour companies provide general services to all kinds of visitors. There is no specialization especially in this part of the world. It has been an issue of concern since visitors in educational tour or research mission have different need with those in holiday. Specialization enables the investor to concentrate on specific class of customers thus providing competitive and satisfactory service (Goodall, & Ashworth, 2013). Consequently, the business is able to attract this kind of customers in large number. Note that many higher learning institutions are getting involved in research activities. Government agencies and non-governmental organizations are also becoming increasingly active in research. This scenario provides a viable opportunity for the business. Another competitive advantage is that research activities have neither peak season nor off-peak season. Institutions are always engaged in these activities throughout the year (Moutinho, et al, 2011). Maybe the only season which most institutions do not engage in research is Christmas holiday. However, there are NGOs which are interested in carrying out research during such season due to availability of information. Some may want to study the behavior of people during this season especially in developing economies. Such season still brings profitable business to tour companies. The Proposed Business Location Coastal region of East Africa offers an ideal environment for this kind of business. Kilifi in particular is the proposed location of this small business. The town lies along the Kenya Coastline with diverse natural resources including mangrove forest and coral reefs. There is also a wide range of wildlife which attracts visitors from all over the world. The region attracts millions of researchers from various institutions especially in wildlife and environmental studies (Mshenga, & Richardson, 2013). Such activities require ideal facility specifically meant for research tourists in the region. Another advantage of setting up a tour business in Kilifi is that the land is plenty and affordable. With as little as $15,000, it is sufficient to purchase a piece of land which can be used to construct a business structure. It lowers the cost of doing business along the coastline thus enhancing desirable return on investment. In addition, building materials are also readily available at affordable rate in this area. Availability of cheap labor is also an essential aspect since it lowers the overall capital. Instead of relying on properties for hire, it is economical to buy the land and construct the structure. In the long-run, it lowers the operational cost hence retaining sufficient revenue as business profit. In this business, security is a critical factor that investors need to consider. In the recent past, this region has been affected by cases of insecurity. Most investors relocated from this place to other regions hence affecting the overall economy of Kenya. Nevertheless, current initiative from the government has really improved the situation. The business environment has been restored. It is important to note that cost of capital is likely to go higher in future due to fast rate of growth in the area. Grabbing the opportunity in advance is necessary to have enough time for establishing the business ahead of others. The issue of insecurity in the past few years serves as a major threat to businesses. It is no longer a threat since the government has established sustainable initiative to ensure there is security in the area. Service Process Marketing Bookings Payment & Issuing Tickets Visitors’ Confirmation Reception Clearance Introduction to the Facility Meals & Drinks Customized Program The confirmation takes place when the staff picks visitors either at the Mombasa Airport or from any other point depending on mode of transport. The company through its staff receives visitors at the premises and undertakes clearance process. The staff proceeds to introducing visitors to the facility. At this stage, visitors familiarize themselves with the premise and facilities therein. Afterwards, visitors may take meals and drinks before proceeding with their own program. Premises Layout Lounge Conference Gymnasium Rooms Hall Main Entrance Reception Swimming Rooms Pool Concrete Path Dining Room Main Kitchen Parking Bay The Lounge The area consists of variety of leather sofa sets and Jacuzzi. There is also a big plasma screen on the wall fitted with stereo speakers. Three glass coffee tables are also there and one coffee maker. Fridge for storing various drinks is placed on the farthest corner of the lounge. The main purpose of this section is to provide relaxation moment to visitors. The total cost of all these facilities in the lounge is approximately $38,000. Reception Reception section consists of three leather sofa sets and two small tables. It also has one plasma screen and two computers i.e. laptop and a desk top. It is well-furnished with necessary furniture and fittings. The purpose of this area is to facilitate general customer service as well as clearance of visitors as they arrive as well as when leaving the premise. The total cost of facilities in this room is approximately $20,000. Dining Hall, Conference Hall and Gymnasium These halls are fitted with all necessary equipment and facilities. Dining hall is used during meal times while conference hall is utilized when holding consultative meetings. Gymnasium is used by visitors who like exercising before going to bed or early in the morning. Total cost of facilities in these areas is approximately $150,000. NOTE: Each of these facilities has direct impact on service delivery for target customers. Recreation facilities such as swimming pool and gym are necessary for physical exercise after day’s events. They enhance individual performance by keeping the body active and relaxed throughout. There is also free time when visitors have more time for personal activities. The facilities help in engaging them within the compound throughout the day especially those who do not like having fun outside. Maintenance of Facilities All these facilities undergo regular maintenance in order to retain their proper functioning. Maintenance service is provided by individuals with proper skills and knowledge in respective field. For example, electronic gadgets are serviced by engineer who is well versed with necessary knowledge. It may be carried out by either an individual or company. The service follows proper tendering process which awards one year contract which is to be renewable. The contract may be cancelled in case of unsatisfactory service or any other reason that relates to contractual issues such as delay. Material Suppliers The small business requires various materials in different sections. These include stationery for conference hall and office use, cleaning supplies and kitchen items such as fresh farm produce, cereals, flour among others. These materials are to be supplied by different individuals through contracts. One year contracts with agreement on nature of materials and cost are to be used. All these materials would be supplied on demand since usage may not be consistent. When many visitors are expected, quantity of food supplies may be increased to meet the demand. To manage the inventory properly, the small business would employ effective manager and several staff in this line. The personnel ensure there is satisfactory storage of materials and timely ordering of perishable goods. To enhance proper inventory, the business may adopt usage of suitable software/ computerized system. Coordination among different department is also essential in ensuring efficiency in ordering and re-ordering. Regulatory and Legal Compliance To operate such a business in Kenya, one has to register the company in accordance to existing laws. Once the company is registered, the permit is acquired from the ministry of tourism. Besides there are other regulations that need to be followed such as safety measures and tax compliance measures. There is also a requirement on employees hiring and remuneration. All these ensure that the business operates smoothly without any interruption or conflict with authorities. The local government also charges a certain amount of money as fees for operating within its jurisdiction. Company Employees The small company may start with several employees in different sections as follows: Title Number Remuneration (Ksh) General Manager 1 140,000 Operations Manager 1 120,000 Accountant 1 120,000 Receptionist 1 50,000 Office Assistants 3 40,000 Drivers 2 30,000 Store Supervisor 1 50,000 Chief Chef 1 50,000 Chefs 4 30,000 Security Personnel 2 40,000 Total 17 Total number of permanent staff is 17. The company would prefer outsourcing security and cleaning services. Two security officers who are permanent employees would provide assistance to other outsourced guards. The two are also to man CCTV room. One would work during the day and another one during the night. The recruitment may be conducted by local HR agencies in order to facilitate fairness and accountability. Only those with right qualification would be considered for employment. This helps the business to avoid costs associated with further training (Guest, 2011). However, internal training may be conducted to ensure all employees are aware of company objective and expectation. The remuneration would be in form of local currency which is Kenya Shillings (Ksh). The amount depends on seniority level and individual contribution towards achievement of company objective (Longenecker, & Fink, 2013). It also depends on individual engagement in the business in terms of number of hours each day. For example, one would expect the general manager to be within the premises or in company’s activities for more hours than other employees. In addition, he is the link between the company and external environment hence deserves higher pay. To ensure legal compliance in matters of employees, the company would ensure each employee pays income tax to the government. Other statutory deductions in accordance to local laws would also be adhered to. The business would also consider regulation on fair remuneration which meets the industry standards. 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