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Category Archives: Destinations

Going for Gold: Preparing Hospitality Businesses for London 2012

The Final Countdown….

The London 2012 Olympic Games are just over 100 days away and final preparations are taking place to host ‘the greatest show on earth’. Approximately 4 million visitors from across the globe are expected to descend on the capital during the Games.

There is no doubt that this is a much-needed boost to the UK economy, and more importantly, a chance to shine and leave a legacy for the future.

Hospitality businesses have an incredibly important role to play during the games as they will act as the ‘host’ to the multitude of guests. It is not only the record breakers that will be remembered by the visitors, it will also be the hospitality received in airports, hotels and restaurants. There are a number of areas that Hospitality businesses should consider in preparation for the Olympics.

1. Spreading the Word

Marketing will be important for Hospitality businesses who wish to thrive from the games. Promotions, advertising and even dedicating a page on your website are all options. Is the touch relay passing through your town?  Is the marathon passing your property? What venues and events are in your area? How can your business play a part in the build up to the games? These are just a few questions which should be considered in a marketing campaign

2. Building Robust Relationships

The success of Hospitality businesses often relies on building robust and sustainable relationships. This will be as important, and if not more important during the Olympic Games. Businesses should consider building relationships that will enhance the service offered to customers and ultimately build an experience to remember. Potential options for building relationships include:

  • Pooling your resources to allow for increased efficiency and higher margins
  • Joint marketing activities to share costs and increase awareness through multiple outlets (e.g. advertising on each others websites)
  • Building experiences through cooperation such as hotel and meal or attraction packages. This creates a sense of value for money and improves the overall experience for your customers.

3. Creating Positive Experiences

Many people will visit the games for a once in a life time experience. It is important that this experience is managed by Hospitality businesses. Experiences can be broken down into a three stages:

  • The pre-experience which involves marketing activities, initial communication with potential customers, website design and interactions such as a reservation call. The pre-experience provides an opportunity for businesses to manage the expectations of potential customers and set the scene.
  • The live-experience which is when the customer is actually on site. This allows businesses to deliver the experience to a customer.
  • The post-experience which is after the customer has left. This allows businesses to carry out further marketing, offer promotions, gather feedback and create a sense of loyalty to ensure that the customer returns.

All three areas should be considered carefully and aligned to one common goal – unique and memorable experiences.

4. People are Key

It is a known fact that the people employed on the front line and in direct contact with the customer are vital for Hospitality businesses. In preparation for the games, businesses should consider a detailed labour plan. This should include; if any additional skills needed for your business during the games, where your labour will come from and how those people will travel to the place of work. This should be organised sooner rather than later as it is likely that ‘skilled’ labour will be scarce during the games.

5. Not in London?

10 major venues around the UK will give plenty of opportunities for Hospitality businesses outside of London. Consider how your business can benefit from events in your area and what part it can play in the wider success of the games.

6. Keeping the Flame Alight

There has been much talk about the legacy of the Olympics and how London and the UK will benefit in the future. The Hospitality industry must also consider its own legacy as a result of the games. Businesses must take advantage of the many opportunities to create memorable experiences to the abundance of visitors that will visit London and the UK during the games. Keeping the flame alight will be vital to the recovery of the economy and future growth of the Hospitality industry.


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Posted by on March 15, 2012 in Destinations, Management

 

Creating Experiences through Cooperation

It is clear as we look around…….the experience economy is upon us. The Tourism and Hospitality industry in particular is striving to grasp the concept of creating experiences for its consumers. You only have to look at business such as Yo Sushi, Dinner in the SkyVirgin Galactic and many of the hotels being built in the UAE to realise that ‘experiences’ are number one for future competitive advantage.   

But what about smaller business and the destinations they operate in? It is a fact, that although we talk about large multinational companies, it is the smaller businesses that make up the majority of the Tourism and Hospitality industry. So, how can these small businesses strive to create ‘memorable experience’ to their customers? I believe the answer is co-operation. This method of business has been around for years in the form of ‘package holidays’ and has proven extremely successful. This can be implemented on a much smaller scale to draw a number of smaller experiences into a ‘memorable experience’.Virgin Galactic and many of the hotels being built in the UEA to realise that ‘experiences’ are number one for future competitive advantage.

Examples of Co-operation

Co-operation can be as small as holding a leaflet on a local attraction, but here are a few (and only a few) examples of businesses that co-operate to enhance the experience for their customers:

Rail and 2for1 London provide travel, plus discount on many of London’s top attractions

Premier Inn and Beefeater provide comfortable accommodation with great food

Alton Towers and Local Hotels/B&B’s provide a day out to remember with a comfortable nights sleep

London Hotels and Theatre Companies provide accommodation in the heart of London with a great night at the theatre

Las Vegas Attraction Passes provides tourists with an array of experiences for a single price

What are the Benefits?

Co-operation provides a number of benefits for Tourism and Hospitality businesses, and the wider community that they operate in:

1. Small businesses with limited scope are able to combine a number of experiences into a ‘memorable experience’ through effective co-operation with other local businesses. An example of this would be a small hotel co-operating with a restaurant or local attractive by providing a discount.

2. Business can take advantage of ‘free’ marketing and visa versa. This is great for smaller businesses who rely on ‘free’ advertising.

3. Destinations become more appealing to tourists, supporting the notion of sustainable tourism. This allows smaller businesses to make a difference to the destination they operate in by increasing tourism.

4. Transport links and the final destination can co-operate to create experiences. Such as Rail and London 2for1. This idea gives tourists a reason to visit a destination (which are usually made up of small businesses) due to the discounts they will receive.

5. A single transaction cost, such as the Las Vegas attraction pass can create the perception of value for money. Also this reducing the negative feelings associated with payment, as an experience can be paid for in a single transaction. This idea allows an array of small businesses to work together to create a ‘memorable experience’.

Are there any drawbacks?

Although co-operation can create a number of fantastic benefits for Tourism and Hospitality Business, there are a number of potential drawbacks:

1. Co-operation often depends on the management of a mutual relationship. Each party places trust on others to create a positive experience for customers.

2. Similar to the first point, to some extent, co-operation places your reputation in someone else’s hands. A poor experience in any part of the wider experience could have a negative impact on your business.

3. Managing money can also be an issue, especially if the customer is paying for the experience as a whole. Who receives the payment? How long do they hold it for? What percentage do you receive? And when?

4. Maintaining the experience in the long-term can also be an issue. Businesses change their management and strategic direction. Will you ‘fit’ or be part of this?

The key to survival?

Having considered the idea of co-operation in creating experiences, it is clear that it holds many benefits for Tourism and Hospitality businesses. As we continue to develop and become more intelligent consumers, it is clear that ‘experiences’ are the key to creating sustainable competitive advantage. As many small businesses have limited scope, co-operation may become increasingly important as a key to survival and profitability. Co-operation should be considered as a potential way for small businesses to create ‘memorable experiences’ in the future.

 
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Posted by on September 30, 2011 in Destinations, Experience Economy

 

Is Las Vegas Still Competitive as a Tourism Destination?

Article: Adam Beck discusses Las Vegas and its competitiveness as a tourism destination in the future.

Welcome to Las Vegas!

Las Vegas, Nevada ‘the gambling capital of the world’ has an interesting and lucrative history stretching back over 100 years. The city has grown dramatically in population over the past 50 years, in fact over 1000% from 54,405 residents in 1960 to 583,756 in 2010 (LVCVA 2011). Over this time large multi-national companies such as MGM Mirage, Wynn, Hilton and Marriott have shaped the skies of the Las Vegas with unique and eye-catching ‘mega’ hotels – some with over 5000 rooms.

Las Vegas currently has 148,935 hotel rooms across the city and despite talk of over capacity, various projects have been completed in recent years and others are planned for the future. MGM City Center, the most expensive privately funded project in USA history opened in late 2010 adding some 7800 rooms to Las Vegas. Other future projects include a replica of the famous Plaza Hotel in New York and an entire hotel themed on Elvis.

Las Vegas has enjoyed significant tourism growth in the past 50 years from 5 million visitors in 1970 to 37 million visitors in 2010 – an extraordinary statistic for any tourism destination. However, in recent years it can be argued that Las Vegas has began to suffer. The city is experiencing little growth in the number of visitors and the amount they spend (Las Vegas Convention and Visitors Authority Statistics 2011).

This article presents an investigation of the external environment, the internal operating environment and a SWOT analysis of Las Vegas. These findings can be used to identify potential issues which may affect the competitiveness of Las Vegas as a tourism destination in the future.

External Environment: PESTEL Analysis

Johnson et al (2008) state that a PESTEL Analysis ‘categorises environment influences into six main types : Political, Economical, Social, Technological, Environmental and Legal’ Therefore, this tends to provide a detailed view of the external environment which could potentially have an effect on the competitiveness of Las Vegas as a destination :

Political – Negative impact

  1. Threat of terrorism attacks
  2. Threat of war in areas of the world
  3. Loss of trust in financial institutions

Economical – Negative impact

  1. Global recession and recovery?
  2. Rising oil prices – increasing airline fairs
  3. Unemployment rates and lack of disposable income
  4. Luxury commodities such a tourism falling

Social – Positive impact

  1. Younger population looking for experiences
  2. Population (all ages) able to travel

Technological – Positive impact

  1. Access to the internet growing
  2. Increasing in technology improve experiences
  3. Mobile internet and GPS – seeing before you go
  4. Travel websites such a trip advisor to share experiences

Environmental – Negative impact

  1. Increased awareness of natural environment
  2. Access to natural resources
  3. Climate change – affecting airfares and opinions

Legal – Positive impact

  1. Increases in minimum wage allowing more disposable income
  2. Changes in government policies

Internal Environment: Five Forces Analysis

Johnson et al (2008) describes that a Five Forces Analysis ‘helps indentify the attractiveness/success of an industry in terms of competitive forces : buyer power, supplier power, threat of new entrants, substitutes and inter-firm rivalry’. This framework also tends to be useful when analysing the competitiveness of a destination.

Inter-firm rivalry (High)

Competition between firms in Las Vegas tends to be very high creating great choice for consumers. Las Vegas has over 113 hotels with 38 large (over 100 rooms) on the strip itself. The destination also holds a wealth of restaurants, retail outlets, attractions, wedding chapels, conferences centres and casinos. High levels of competition often create greater choice for consumers, improved quality and perhaps more importantly lower prices. Hotels on the strip continually have discounts on rooms and often a nights stay in a strip hotel can be as low as $20. The high number of firms ought to suggest that unemployment is relatively low in Las Vegas.

Threat of potential entrants (Low – Medium)

Threat of potential entrants to Las Vegas tends to be medium to high. The Las Vegas strip is very limited for space which pushes prices to over $34 million per acre (Hotel Interactive, 2007). Often hotels are bought and imploded to allow space for new developments on the strip. Due to these high entry costs firms wishing to enter the Las Vegas market would need high levels of capital. Therefore, this creates large barriers to entry which would deter many firms.

Bargaining power of buyers (High)

Bargaining power of buyers to Las Vegas as a destination is quite high. The introduction of internet and increases in technology now makes it easier for more people to travel. However, Las Vegas benefits from domestic tourism and has a repeat guest’s average of 81%. Although, as other destinations such as Macau in Chine become more popular, Las Vegas will need to continue to adapt in attracting visitors.

Bargaining power of suppliers (Low)

Las Vegas is a well established destination therefore this would assume that it has a well-integrated supply chain for its needs as a competitive destination. One example of this is the Hoover Dam which supplies enough energy for over 500,000 homes each year. This is not only efficient and sustainable but is considerably cheaper than other forms of power supply. However, it is important to understand that energy sources such as the Hoover Dam will not be sufficient if Las Vegas continues to grow in the future.

Threat of substitutes (High)

Threat of substitutes occur both internally in Las Vegas and external between different destinations. It has already been mentioned that competition in Las Vegas tends to be very high and the destination offers many forms of entertainment. Therefore, on experience such as the theatre can be substituted for shopping or dining out. This forces firms in Las Vegas to be very competitive in terms of price and quality which makes the destination more competitive.

Las Vegas is also in competition with many other destinations throughout the world. However, Las Vegas does hold a benefit of being one of the only places in the world where gambling is legal. Although, area such as the Middle East and China are beginning to compete more seriously with Las Vegas as desirable destinations for entertainment.

Internal Environment: SWOT Analysis

Planning, development and management of Las Vegas will continue to be important in the future. The Financial Times (2008) have already reported plans for officials to encourage more visitors to Las Vegas with increased marketing. It is possible to use a SWOT Analysis to identify potential areas which could be exploited in order to increase and maintain a competitive position.

Strengths                                                                                     

  • Image of Destination
  • Good infrastructure
  • Well established organisations
  • 81% annual repeat visitors
  • High USD contribution.
  • High domestic tourism from close by states in America (50%).
  • Loyalty to the destination (81% repeat visitors)
  • Ability to provide a wealth of experiences
  • Little elements of seasonality on tourism
  • High competitive forces which encourage lower prices and greater quality

Weaknesses

  • Location of Las Vegas and natural resources to support the city’s growth
  • ‘Gambling’ image restricted to limited market segments
  • Difficulty in travelling from locations such as Europe (as Las Vegas is in far west of USA)
  • Only 19% annual new visitors
  • Over 21 alcohol laws deter 18-20 year old travellers
  • Low threat of potential entrants could make the market stagnant or even decline.

Opportunities                                                                             

  • Appealing to wider markets by adding attractions and changing image
  • Maintaining repeat visitors and increasing new visitors
  • Holidays which appeal to family audiences
  • Taking advantage of new forms of technology to improve hotel design etc.

Threats

  • Development of other destinations around the world such as Dubai, Abu Dhabi and the East
  • Development of alternative ‘gambling’ capitals such as Macau, China.
  • Credit Crunch and rising oil prices may reduce visitors from abroad.
  • Possible reduction in visitor volume
  • Global terrorism and war
  • Access to natural resources (water)

Assessing the Competitiveness of Las Vegas as a Destination

This article has provided an analysis of the competitive position and success of Las Vegas as a destination. Initial analysis into key trends demonstrates that Las Vegas has been a successful and growing destination for many years. The destination continues to attract vast numbers of visitors, however, figures of visitor volume and a number of reports show that Las Vegas may have started to suffer in terms of competitiveness.

A number of factors which are uncontrollable have been considered in a PESTEL analysis. Results show that economical, political and environmental factors will all potentially affect Las Vegas in the future. However, social and technological factors seem to benefit the destination in its competitiveness. A Five Forces Analysis shows that the operating environment of Las Vegas is highly competitive. These competitive forces create high levels of competition between firms in Las Vegas which are ultimately passed onto the consumer through low prices, increased choice and greater quality. All factors which make Las Vegas more attractive as a destination and therefore more competitive.

Finally, a SWOT analysis highlights a number factors which should be considered for the future. Las Vegas holds a great number of strengths, however, there are a number of weaknesses and threats which currently affect its competitiveness and will continue to so in the future. A number of opportunities, some of which are already being exploited will allow Las Vegas to increase its long-term competitiveness.

Although Las Vegas appears to have been successful and has held a strong competitive position for many years, it will be increasingly important in the future to monitor this position. However, a number of issues which are outside of the destinations control such as the recovery of the recession, rising oil prices and access to natural resources may control the direction of Las Vegas in the future.

Please note: This article is published for information only and any recommendations given are the opinion of the author and therefore, should only be used if the reader feels they are applicable. A full reference list is available on request via email.



 
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Posted by on May 20, 2011 in Destinations