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Destination Management

Lecture 5

University of Applied Sciences Stralsund

Leisure and Tourism Management

WS 2009/2010

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Part Two

Explores the issues involved in the developmentof new attractions, including feasibility studies, financing,

business planning and project management.

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Summary of the last two lectures

• 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)

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Business Planning

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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;

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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.

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BusinessPlan

Implem

entatio

n

???

Business Planning Introduction

Idea

Feasibility

Study

Market Study

Site Selection

Financial Viability

STOP

STOP

viable?

interesting?

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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);

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Why Plan? cont.

• Adapt the business to changes in the market;

• Gives every person in the organisation 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’.

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Case Study „Business Plan Outline“

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case study „Business Plan Outline“

• Provides an overview of the main headingsof a business plan

• The Business

• The Market

• The Marketing Plan- Business Objectives- Market Research- Marketing Objectives- Marketing Strategy

• Operations

• Financial information

• Monitoring

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case study „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

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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.

!

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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?

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Market Research

• Recognise that the market is not stagnantand 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.

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Marketing Strategy

• Customer 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.

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Financials

• Critical part of Business Plan;

• Should cover following:

• Cash flow,

• Projected revenue;

• Pricing structure and costs,

• Profit & loss projections,

• Long-term capital requirements.

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Human Resource Management

• Recruitment 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.

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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;

>>>

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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.

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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;

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case studies:

Market analysis and visitor forecasting

as the most critical factors for reliable and

successful feasibility studies and business plans

“Crystal ball gazing”

“Gerbeau wants to buy the Dome“

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Homework “VisitScotland Business Plan”

• Why do strategic positioning and marketing strategy play a major role in this business planwhile financials, human resource management and operational planning are less important?

• What addressees are conceivable?

• What product can be identified?

• How is the market segmented?