Tourism and Hospitality Management

Introduction

As a part of my necessary course evaluation, I have been suggested to make the review on the reasons for growing kindness and travel and leisure market on the globe. I have chosen Sydney to appear this subject in this review. Sydney is trying to increase in kindness market within 2020. In this review I will concentrate the different technique that will increase the Australia travel and leisure market. The Nationwide Long-Term Tourism Strategy was released in Dec 2009, followed by the 2020 Tourism Industry Prospective in Nov 2010. The Nationwide Long-Term Tourism Method being modified and pointed since its release to more carefully position the technique with the 2020 Tourism Industry Prospective (Tourism Australia, 2010).

Travel and leisure 2020 represents a further landmark in Australia tourism policy.  It symbolizes an incorporation of the future focus, research and cooperation started under the National Long-Term Travel and leisure Strategy with the growth ambitions of the 2020 Travel and leisure Market Prospective.  Travel and leisure 2020 creates on this base to support industry enhance its economic potential.

Travel and leisure 2020 symbolizes an unmatched level of collaboration between market and the Australia and state and area govt authorities to address the limitations to market development. It is a whole of govt strategy to improve the industry’s effective potential. It concentrates on creating a policy structure that will support market development and provide market with the resources to contend more successfully in the international economic system and to take advantage of the possibilities that Japan provides.

The paper studies the new control exercise in the place market. Over the past few years, the environment for resort control in Sydney has changed drastically. Difficult company conditions require the modification of control in the place market. From the old-style company, in which resort professionals were targeted inwards on the place and its function, a new model covering a more on the outside targeted focus is now required (Kotler, 1997). The current modification of socially-owned resorts into capital-based and market-oriented companies will speed up the general process of privatisation and enhance motivation control strategies (Vrtiprah, 2001). The report gives the analysis outcomes of the new control exercise in the Sydney. The analysis known as control level, sex, age and academic framework of professionals, their training, knowledge, skills and features of control, main features of control, delegation of government bodies and obligations, control system, decision-making, styles of major and regulating of professionals by their time. The obtained outcomes have been compared with the earlier control approach of the above-mentioned hotel (Tourism Australia, 2010). The objective of the paper is to point out the importance of the new management practice and its contribution to the successful hotel business.

The Emerging Tourism Industry in Australia

Understanding global tourism

The trend of travel and leisure since 1950 has been amazing in terms of development, propagate and variation. The worldwide vacationer routes since then have started from simple 25 thousand to reach 940 thousand truly. The fast development and propagate not only lead the globalization of individuals’ motions as never before but also provided in creating a vivid industry and possibilities for an incredible number of people

The importance of tourism in Australia

Travel and leisure is a significant market for Sydney. It produces $94 billion dollars in spending and leads to nearly $34 billion dollars to Australia’s GDP, directly utilizes over 500,000 individuals and produces nearly 10% of our total trade income, making it Australia’s biggest service trade market.  It helps to invest in critical financial facilities like international airports, streets and resorts, and provides the people-to-people linkages to Australia’s international interests. It also performs an important part in the financial development of local Sydney, with 46 pennies in every vacationer dollar spent in local Sydney (Tourism Sydney, 2010).

Diversity in the industry

The travel and leisure market includes almost 280,000 businesses that support the guest economic system from housing and bars, gambling houses, trip organizations, travel specialists, transport organizations, and areas of the retail and education industry. The market is backed by a supply sequence that produces significant economic multipliers. Every dollar spent on travel and leisure produces an additional 91 pennies in other areas of the economic system – higher than multipliers in exploration, farming and financial services (Hoskisson, 2009).

Australia’s competitive advantage

Sydney has a success of resources that distinguish it from other locations around the world, such as unique scenery and nature-based travel and leisure offerings; natural lifestyle and heritage; innovative places and regions; and friendly, resistant, culturally different inhabitants.  However, a effective and growing travel and leisure industry needs more. Improved quality, product choice, skills and infrastructure will maximise and sustain economic value from Australia’s natural advantages as a tourism destination.

The current environment – challenges and opportunities

Challenges

Improving competitors and the rise of the Australia dollar are two of the many significant difficulties currently experiencing the Australia travel and leisure market. Australia’s worldwide market has reduced nowadays and household travel and leisure expenses have decreased since 2000.  Together with government authorities, the market needs to work towards the 2020 Tourism Industry Potential. Goals include investment in new item, enhancing efficiency, increasing usage of technology, and dealing with labour and skills shortages, all of which will eventually impact on enhanced service and item quality (Mintzberg et al, 1998).

Opportunities

Australia’s travel and leisure providing of natural, social and man-made destinations stay well known and popular by guests. Accomplishing the 2020 Tourism Market Potential would increase tourism’s participation to GDP by as much as 50% to an approximated $51 billion dollars  (Rainer and Turban, 2009).  Economic powerhouses in Japan, particularly Chinese suppliers and Indian, are driving new success and intake that can convert into huge need for guest encounters. The digital trend will be fast-tracked in Sydney with the move out of the Nationwide High speed internet System, enabling travel and leisure providers to better interact with clients and create new businesses (Rainer and Turban, 2009).

Government response – working with industry

Travel and leisure Ministers have led and recommended the perform system under the Nationwide Long-Term Travel and leisure Technique, and dedicated to working towards accomplishing the 2020 Travel and leisure Market Potential (Australian Bureau of Statistics, 2010).  The perform system is constantly on the progress over time as new problems of national importance require the attention of government authorities, with research featuring places in need of action.

Travel and leisure 2020 represents the next stage in the success of the National Long-Term Travel and leisure Technique.   Through Travel and leisure 2020, government authorities at all levels will need to work with tourism market providers to apply the procedure and observe success against the 2020 Travel and leisure Industry Potential (Australian Bureau of Statistics, 2010).

The potential for the industry in 2020

Source: Tourism Australia, 2011

 Industry findings

• There are currently 36,000 useless tasks in the travel and leisure market, while an additional 56,000 – 152,000 tasks will need to be loaded to fulfill prospective (Australian Institution of Research, 2010)
• 40,000 – 70,000 new areas are required to fulfill potential
• Aviation potential will need to develop by 40-50% for worldwide and 23-30% for household to fulfil prospective (Australian Institution of Research, 2010)
• Only a third of Australia’s travel and leisure providers have online arranging and transaction facilities

By 2020:

• Achieve $115 billion- $140 billion dollars instantaneously spendŸ
• Hold or develop business in key markets
• Grow labour force
• Increase housing capacity
• Increase worldwide and household aircraft capacity

Enhance market excellent and productivityFollowing a evaluation of the success made by the Nationwide Long-Term Travel and leisure Technique Working Categories and the 2020 Travel and leisure Industry Potential, the modified Travel and leisure 2020 will have six ideal places. The new ideal places develop on the day-to-day work performed by market and across govt in building the tourism product, transforming need into visitation rights, creating tourism product, and making contributions towards a more worldwide aggressive tourism market (Australian Bureau of Statistics, 2010).

Grow demand from Asia

While promotion investment across a healthy profile of marketplaces is required, Sydney has a unique opportunity to drive demand from Japan. Over the 2010-20 period, Japan is predicted to play a role more than half of the estimated development in worldwide visitation rights with 42 % of that development predicted to come from Chinese suppliers (Australian Bureau of Statistics, 2010). Most nations in Japan have growing financial systems with good customer assurance, growing development in the middle-class (especially Chinese suppliers, Indian and Indonesia), and Sydney is a near “western developed”, British discussing country, with strong location attraction. Industry and govt needs to expand customer knowing, enhance submission, create designed promotion strategies, and appropriate product, as well as appropriate policy frameworks.

Build competitive digital capability

Powerful electronic ability is important in both promotion Sydney and in the submission of product. 80 percent of Aussies are on the internet and by 2020, 66% of the world is expected be on the internet. Creating strong and efficient on the internet promotion and transactional abilities is important to remain aggressive. Currently only a third of Australia’s travel and leisure providers have on the internet arranging and payment features, restricting their ability to service customers both locally and offshore. Government authorities will work with industry to ensure more travel and leisure businesses are able to take advantage of on the internet opportunities

Encourage investment and implement the regulatory reform agenda

Travel and leisure financial commitment in Sydney is lagging. From 2000-01 to 2009-10 financial commitment in tourism increased at only half the speed of financial commitment in the rest of the Sydney economic system. Travel and leisure currently encounters a extraordinary regulating problem that effects adversely on financial commitment. Government authorities will work with market to reduce the limitations to financial commitment so that market can purchase the products and facilities customers are seeking.

Ensure tourism transport environment supports growth

Travel and leisure transportation potential and facilities needs to allow more and more guests to travel to, from and within Sydney. Government authorities will work in collaboration with industry to ensure the supply of transportation potential and facilities is constantly on the progress of demand and allows, rather than prevents, tourism traffic.

Increase supply of labour, skills and Indigenous participation

The tourism industry has a labour shortage of 36,000 and an employee vacancy rate over four times the national average that is preventing parts of the industry from effectively servicing global customers. By 2015, an additional 56,000 people will be needed to fill vacancies (including 26,000 skilled positions). Government will work with industry to support industry recruitment, retention, labour mobility, education and training to fill these gaps, and explore ways to increase the supply of skilled tourism labour and Indigenous participation.

 Build industry resilience, productivity and quality

Industry productivity is low compared to the rest of the Australian economy and to tourism firms in competitor countries. This is limiting Australian tourism operators’ ability to provide consumers with value for money experiences. Building on Australia’s competitive advantages, governments will work with industry to increase industry productivity, innovation and quality.

Implementation of Tourism 2020 of Australia

All stakeholders have important roles to implement Tourism 2020.

Tourism operators and related industry bodies will continue to participate in or support Working Groups, as well as use, refine and promote the deliverables of the strategy. This includes integrating the work into their own sectoral strategies and plans, and capitalising on market opportunities.

Working Groups will continue to progress and oversee key actions under the Strategy, bringing together members from the Australian state and territory governments and industry (Galičić, 2000). The Tourism Quality Council of Australia will continue to bring together governments and industry to drive the competitiveness and quality agenda across the Australian industry.

State and territory governments will continue to work closely with industry and have key responsibilities (including lead roles) across all strategic areas. Other state and territory government agencies hold critical levers of tourism and so have important roles, as do regional and local tourism organisations.

The Australian Government has a lead role to play in several areas led by the Department of Resources, Energy and Tourism and Tourism Australia and other Australian government agencies which hold critical regulatory and policy levers affecting tourism.

Leadership is provided by Tourism Ministers, both at a Federal level and across all states and territories, supported by the Australian Standing Committee of Tourism (comprising the CEOs of peak government tourism organisations).

Implementation will be phased.  A more detailed implementation plan will be developed supporting the Strategy, including timelines and details around measurement.

Management in the Australian Hotel Industry

These days, the key issue in the hotel industry management is how to develop a strategy, which is able to range a firm with the best in the industry because the very strategy is the reason to succeed or fail. According to the paradigm dated from the ’90s, a firm cannot be successful on a long-term basis if oriented only on exploiting the possibilities in already existing activities and on current markets. The analysis of discovering its competitive capacities is useful because it enables the understanding of those individual activities in the entire production – the service process having a part in cost determination, service quality image and the final service (Australian Bureau of Statistics, 2010).

Managers in the hotel industry are characterised by the leading style ranging from the authoritative to a consultative one in hotel industry of Australia. They practice top-down management, where the decisions are made from the top management to the operative management, but the most important is that every level of the management pyramid is responsible for its activities only to the superior level. The global hotel industry is changing rapidly and continuously, therefore, it is necessary for a hotel’s firm management to adjust to those changes.

The future organisation is determined by a manager’s adjustment ability to the turbulence of a dynamic and complex environment (Galičić, 2000, p. 444). In order to exist, the present hotel firms have to attract and employ the creative and not the traditional experts, with the main purpose of developing an innovative business strategy. The accent is on service quality improvement and efficient use of human resources through transformational leadership. Today’s managers in the hotel industry are dealing with  three key issues:

• Creating the common vision;
• (Re)designing organisational structure;
• Serving the employees.

The most important of these issues is that managers get confidence, loyalty and respect from their subordinates. It is necessary for employees to feel important as a part of an organisation and to be able to distinguish the relevant from the irrelevant, with a view to a successful business transaction (Galičić, 2000, p. 445). One of the most important new leading methods of businesses is transformational management, which has its own characteristics. In the near future, transformational hotel industry management will be desirable (see Table 1).

Transformational management should be treated as the all-level manager’s activity. The stress is on the whole organisation and future success, but at the same time, the concentration is on individuals and their needs, teamwork and on designing a new environment. In the Croatian hotel industry, most of the hotels are under the state proprietary, so they do not use new management practices. Today, they look for a new owner. In this article, we focus on the Hotel Excelsior and its management practice, which has changed drastically in the last two years when the hotel was sold as a consequence of the privatisation process.

Table 1. Characteristics of transformational management (Galičić, 2000, p. 446)

To understand better we need to analyze Porte’s five forces to the management. Here is the analysis.

Porter’s Five Forces

A competitive strategy must meet the opportunities and threats inherent in the external environment; it should be based on an understanding of  hotel industry and economic change in Australia.

Porter identifies five forces that shape every industry and which determine the intensity and direction of competition and therefore the profitability of an industry.  The objective of strategic planning is to modify these competitive forces such that the organization’s position is improved. Management can then decide, based on the information given by the Five Forces model, how to influence or to exploit industry characteristics (Kevin, Coyne and Subramaniam, 1996).

Bargaining Power of Suppliers

The term “suppliers” comprises all sources for inputs necessary to provide products.  And “supplier power” refers to their relative bargaining power, which, when high, allows significant influence on the industry and expropriation of profits.  The company also plans to centralize purchasing operations and to decrease merchandise inventories, both of which will further reduce the power of its suppliers. That the primary source of both planned and actual efficiencies in this area, however, derive largely from cost initiatives and financial policy, points to the firm’s emphasis on cost leadership. To determine the most efficient way to purchase inventory, Lowe’s looks at every product of every vendor individually  (Porter, 2008).

This method should decrease cost per product via four methods of distribution: flowing goods through regional centers, shipping by commodity focused consolidation, reloading distribution centers, and direct shipment to stores.  “Our goal,” says Bob Tillman, chairman and CEO, is to be sending more trucks from our distribution centers more often with any one sku per shipment.” (Home Textiles Today. 2002. p. 10.)   Hence, Lowe’s has the advantage.

Bargaining Power of Customers

The bargaining power of customers – their influence over price — is reduced via efficient supply chain management in the hotel industry.  Other factors — brand loyalty, threat of backward integration, and marketing based on factors other than price – influence buyer power.  Naturally, reduction in the number of competing firms is the preferred method of addressing this influence. .

Threat of New Entrants

The magnitude of this threat is inversely related to Australian tourism industry, which determines the amount of market share necessary to enter the industry.  The greater the difference between industry and entry unit costs, the greater the barrier. Based on relative economies of scale, it can be inferred.

Barriers also result from brand loyalty, and this implies proprietary brands. But it is not the barriers to entry represented by these proprietary contracts that confers the greatest value; the brands are a necessary component of differentiation strategy, a primary source of competitive advantage.  A strong influence over suppliers and distributors, moreover, as well as price-cutting, for which Australian tourism is well positioned for, can also create barriers to entry.

Threat of Substitutes

This threat, in so much as it exists, points to marketing failures.  Outside of technological revolutions, innovative offerings and product development, identification of and response to consumer needs, reduces this threat.  In so much as substitute products consist of those in other industries, however, a threat exists when a product’s demand is affected by the price change of a substitute product (Porter, 1980).  But there are no true substitutes for home improvement supplies; and therefore we may discount this factor.

Rivalry

Rivalry is identified and measured according to industry concentration. A low concentration indicates a competitive or “fragmented” market composed of many rivals, none having significant market share. (A large number of firms increase rivalry.)  Conversely, a high concentration indicates less competition; a small number of large firms hold most of the market share.  Product differentiation, avoiding excess productive capacity, segmentation, and industry-wide communication are effective means of combating rivalry (Porter, 1979).  Ultimately, mergers or acquisitions with or of competing firms can be invoked.

The definition of what constitutes the “market” is important here. Competition for the same customers and resources is spread among a relatively large number of firms. The industry in general, then, is fragmented, a partial result of the varied merchandise that each store sell (Porter, 2008).

Standards and Quality application in Australian Tourism