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Travel & Tourism Industry Business Drivers. Travel & Tourism Industry Optimise Capacity Utilisation Reduce Costs Key Business Drivers Grow Market Share.

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Presentation on theme: "Travel & Tourism Industry Business Drivers. Travel & Tourism Industry Optimise Capacity Utilisation Reduce Costs Key Business Drivers Grow Market Share."— Presentation transcript:

1 Travel & Tourism Industry Business Drivers

2 Travel & Tourism Industry Optimise Capacity Utilisation Reduce Costs Key Business Drivers Grow Market Share

3 Business Strategies Extend Guest Services Business Partnerships Custom Tailored Travel Packages Rent/leasing of excess Resources Optimise Capacity Utilisation Customer Loyalty Program

4 Optimise Capacity Utilisation Extend Guest Services Strategy: Create New Guest Services Offer a range of new leading edge products and services that are innovative and create additional revenue streams - inflight/inroom facilities Differentiate products/services for the Business Traveler, Leisure Traveler,Tourist or customised Personalisation Objective: Increase revenue streams by offering new innovative guest services Leisure services, Interactive entertainment, mobility services, video on demand & Internet access

5 Optimise Capacity Utilisation Customer Loyalty Programs Strategy: Customer Loyalty Programs Frequent Flyer Hotel Frequent Guest Visa/Fly Buys Point Cards Frequent Rental Car Hire Restaurants Duty Free Objective: Increase Sales to existing customer base Encourage more frequent & longer Travel/Guest stays

6 Optimise Capacity Utilisation Business Partnerships Strategy: Business Partnerships Partner with companies which Offer complementary travel industry solutions, eg. Insurance companies, etc. Objective: Grow your market share by developing strong business partnerships Access to larger markets/larger customer base - Domestic/Global

7 Optimise Capacity Utilisation Customer Tailored Travel Packages Strategy: Custom Tailored Packaging Personlisation/customisation Niche markets - skiing, diving, last minute Segment of the market (business, leisure, Tourist) Value Add Objective: Increase sales Entice customers to invest in personalised offerings and packaged offerings.

8 Optimise Capacity Utilisation Rental/Leasing/Sale of Excess Resources Strategy: Rent/Leasing of Excess Property/room Space Online Auction of flights/rooms - Last minute specials Rent/Lease excess property/office space/carrier space Objective: Increase revenues though alternate channels Achieve maximum occupancy/capacity levels through other channels/offers

9 Business Strategies Brand Extension/ Positioning & Target Markets Acquisitions & Strategic Alliances Establish a Presence with Tourism bodies Grow Market Share Establish New distribution channels

10 Grow Market Share Brand Extension/Positioning &Target Markets Strategy: Extend Brand Extension/Positioning & Targeting Markets Entering into new markets Focusing on Niche Markets Bundling/Packing offers for a targeted Traveler or segment Objective: Increase Revenues through Brand Extension/Positioning & targeting Markets Airlines are entering into Mobility & Wireless Comm. Personalisation for Loyal Customers Packaging all areas of tourism (car rental, hotel, travel)

11 Grow Market Share Acquisitions & Strategic Alliances Strategy: Acquisitions & Strategic Alliances Acquire affiliate/competing Partners Form Strategic Alliances to leverage services/offerings Complementing services for packaging to increase $ point Objective: Grow Market share by acquiring other companies Grow Market share by forming Strategic Alliances

12 Grow Market Share Establish New Distribution Channels Strategy: Establish New Distribution Channels Agents, Wholesalers, Call Centre Internet Procurement Member of Portal Partners Objective: Grow market share by expanding your exposure & revenue through new distributions channels

13 Grow Market Share Membership of Tourism Bodies Strategy: Establish a Presence with Tourism Bodies Online Presence Marketing/Campaign Presence Industry endorcment/credibility Objective: Grow market share by expanding your presence/access through alternate channels Tourism Bodies Portals

14 Business Strategies Join Buying Group, Promotional & Marketing scheme Effective Staff Training Consolidation of Back office Processes and Outsourcing Leading edge internal processes & technology Reduce Costs Internet Access & Reservations/bookings

15 Reduce Costs Join Buying group, Promotional & Marketing Scheme Strategy: Join Buying group, promotional & Marketing Scheme E-Procurement Consortium for marketing & promotion. Aggregation of purchasing spend Objective: Reduce purchasing costs, promotional & Marketing costs by belonging to larger buying group

16 Reduce Costs Effective Staff Training/Flexible Staff Strategy: Effective Staff Training/Flexible Staff - rostering system Objective: Reduce costs by retaining trained staff Web based training Technology based training Match staff to service requirements

17 Reduce Costs Consolidate Back of House Processes Strategy: Consolidation of Back of House Processes integrating of processes Outsourcing of non core processes Objective: Reduce costs by consolidating or outsourcing Finance, reservations, IT Help Desk, telecommunications infrastructure and Education.

18 Reduce Costs Internet Access & Reservations/bookings Strategy: Internet Access & Reservations/Booking Online Presence - Reservations/Bookings & Information Access global & domestic markets Objective: Increase Revenues by providing internet Access & Reservation booking systems Build a user friendly, easy to navigate web site which offers tourist information & online bookings & payments

19 Reduce Costs Leading Edge Technology & streamlined internal Processes Strategy: Leading Edge Internal Processes & Technology PMS - Property Management Systems CRS - Customer Reservation Systems GDS - Global Distribution Systems CRM -Customer Relationship Management Objective: Reduce costs and improve service levels by implementing leading edge technology and automating internal processes

20 Travel & Tourism Industry Industry Overview

21 Topics Market Overview Industry Definitions Industry Issues Telco Positioning, Competitors & Partners Glossary of Terms Value Chain Business Drivers & Strategies Map to Telco Capabilities Value Demonstration Case Studies Telco Industry Strategy

22 Market Description Hospitality, Travel & Tourism Sector defined as The vast, complex network of businesses engaged in the lodging, transportation, feeding, and entertainment of the traveler from WTTC The industry sells intangibles Total Travel Experience through packaging products & services. Key Market Segments: Hospitality - Hotels, accommodations, clubs, cafes & restaurants Travel - Air & land people transport, Travel agents & Airports Tourism - Domestic & International Tour operators and state & federal Government Tourism Department

23 Market Overview Market size A$ 60 Billion annual turnover Growing at 10%- 15% per annum (2001/02 projected.4% decline) 4.5% of GDP 13% of total export earnings 64% of total service export earnings Employs almost 1 million Australians 690,000 directly & 290,000 indirectly 7.5 % of total employment in Australia Domestic and International Travel Figures Approximately 4.7 million international visitors per year International 22% Domestic Tourism 67% Domestic Business 11%

24 Market Overview Diverse growth across the sector Air Transport International & Domestic, Hotel Accommodations, profitability will decline by 4.2% Decline due to the following factors: Impact of GST Increased Fuel Prices Slow down in the economy Oversupply of accommodations - Hotels/serviced apartments. Exchange Rate movements leading to a decrease in overseas travel. Impact of recent Terrorist attacks

25 Market Overview Growth reflecting sales volume increases but prices falling Lower value of the Australian dollar to Euro and US leading to an increase of inbound travelers and increasing travel within Australia Increase in inbound and Domestic Travel See Australia Competition cheaper domestic airfares due to new entrants (Virgin Blue) Focus on Niche Markets & Personalisation Increase in major international events held in Australia conference, sporting events, etc.

26 Market Overview Key Success Factors Loyal Customer Base loyalty programs Establish a clear market position & differentiation amongst competitors Efficient channel management & leveraging brand Business Expertise of Operator having a skilled & flexible team - enhanced experience Products & packaging links with other related Transport,Travel & Tourism products Optimum capability & asset utilisation Effective business model being part of a buying or franchise group, joint promotional & marketing schemes

27 Market Overview Key Success Factors, cont. Well developed internal processes reservation & booking systems, property management systems, on-line training, integrated systems Pricing less complex, packaged and tailored for the market sector New Distribution Channels outbound marketing & Internet

28 Market Trends Expansion of Customer Loyalty Programs - Enhanced Packages/offers Online access to flight departures/arrivals & information Services and products Personalisation convenience & choice Expansion of Guest/Travel Services Additional services/products through currency exchange dealers/travel agents Enhanced range of services Leading edge technology for guest services to provide point of differentiation

29 Market Trends Online reservation/booking systems For both the Airlines and hotels, booking reservations and access to information systems on the Internet is of growing importance, eg E-ticketing Caters to hotels and the Airlines Portals & Interactive Web sites Membership of a broader tourism association site E-Procurement - indirect purchases M-commerce Purchase of tickets & bookings through hand held devices

30 Market Trends Streamlining of Business Processes Integration of back Office processes in the industry with centralised data processing and storage payroll, reservations, IT help desk & finance Outsourcing IT & Telecommunications Services Requirement to provide hotels with Managed IT & telecommunications services to reduce capital expenditure and provide for variable cost base.

31 AIRLINESHOTELS Transport % x Revenue Labour Expenses Fuel Maintenance + Repair Passenger Services Sales & Marketing Operating Leases Operating Leases Sub Contractors Depreciation & Amortisation Other Expenses Total Expenses Total Expenses Earnings Before Interest & Tax EBIT Earnings Before Interest & Tax EBIT INTEREST INTEREST TAX TAX NPAT NPAT Key Financials Industry Income statement & Balance Sheet

32 BassACCORHilton Average % x Revenue Labour Expenses Consumables Other Expenses Depreciation & Amortisation Total Expenses Total Expenses Earnings Before Interest & Tax EBIT Earnings Before Interest & Tax EBIT INTEREST INTEREST TAX TAX NPAT NPAT Key Financials Industry Income statement & Balance Sheet - Hotels

33 Federal ExpressTollTPG(TNT) Average % x Revenue Labour Expenses Sub Contractors Rentals & Leasing Fees Depreciation & Amortisation Repairs & Maintenance Fuel Other Total Expenses Total Expenses Earnings Before Interest & Tax EBIT Earnings Before Interest & Tax EBIT INTEREST INTEREST TAX TAX NPAT NPAT Key Financials Industry Income statement & Balance Sheet - Transport

34 Industry Issues Grow & Retain Market Share Acquisitions & consolidation in both the hotel & Travel industry Clarity of Brand & targeted Market positioning Reduce Costs Integrating back office Processes Online bookings & payments Optimum capacity utilisation matching aircraft with routes, hotel rooms, yields, etc. Effective control systems to manage yields better and increase earnings Automation of internal processes reservation systems that integrate with other service providers, ground handling, flights & maintenance

35 Industry Issues Low value A$ dollar Increases inbound travel/tourism Decreases outbound travel/tourism Fuel Costs Capital Costs - Aircraft, etc. Impact of GST On discretionary spending Staffing Online Training Flexible staff Staff retention - incentives Guest/Travel Services Offering leading edge technology in guest rooms wireless lan, internet access, video on demand, interactive entertainment

36 Industry Issues Globalisation Need for globally competitive offerings Weakening Economy Global impact of the inbound/outbound Business travel Exchange Rates Mergers and Acquisitions Competition: New carriers entering the market offering cheaper airfares Accommodations serviced apartments/Hotels oversupply and lower demand for accommodations relevant to 2000

37 Industry Issues Seasonallity Demand Management of seasonal inbound/outbound travel Management of demand for the increase in large international events held in Australia Impact of Technology Video conferencing potentially contributing to a decline in Business Travel Offering leading edge technology in guest rooms/on flights to create new revenue streams Real time access to product & service availability both domestically and internationally Safety Security Terrorism

38 Telco Positioning The Hospitality, Travel & Tourism (H,T&T) segment generates approximately $271m in revenue to the Incumbents Majors and SME Major customers make up approximately 70% of this revenue. Major customers, Qantas and SITA make up approximately 58% of this revenue. Review Industry market share: Estimated total market(Inc SITA)$199 Million Telco Approx % market Share38%

39 Telco Competition Domestic Telecommunication Providers Optus/Singtel, TCNZ/AAPT, Vodafone, Orange Global Telecommunication Providers MCI Worldcom, Global One, BT, AT&T, Equant, NTT Minor Carriers and Service Providers Primus, RSL, WorldCom, Powertel, Global One, WorldxChange and AAPT(focused on CBD) New Entrants into the Market Energy companies, Railways & Airlines (Virgin Mobile) Niche Players Skynet Global (wireless Lan), Intertouch (high speed access Internet Providers & Internet Telephony

40 Target Partners Qantas MicrosFidelio Alcatel Foxtel Phoneware Webpoint Atlas Nokia Layer 9 - Wap Solutions MobileSoft - Equity funded by Telco SITA Cisco Alcatel Nortel

41 Potential Direct Involvement in the Industry Virgin/Telco Business Frequent Flyer Program An alliance that could mean that Virgin offered frequent flyers with co-branded Telco services including Internet access with Qantas Frequent Flyer points being awarded for the usage of these services. Telco.com business travel site Telco could establish a travel site under Telco.com in conjunction with Virgin.

42 Industry Associations & Players

43 Main Industry Research Bodies

44 Mobility Wireless Lan, WAP, GPRS, Prepaid Mobility Packages Efficient Customer & Supplier Management ASP models (Front & Back of House)eg. Micros Fidelio Call Centre Solutions IVR, CTI, Voice and Internet Ecommerce & Ebusiness Solutions Internet information access, Internet bookings & payments Bill Pay Broadband, ISP Access, Data Storage, Web Hosting, EFTPOS Network, Electronic catalogue Industry Applications

45 Managed Solutions/Services managed PABX/Voice, total Infrastructure outsource Competitive Edge/Loyalty Smartcards, access cards for travel & hotels, Guest Services in room internet and entertainment Integrated Branch Networks IP VPN QOS, Soft Contact Centre Solutions Video Conferencing/Teleconferencing Industry Applications

46 Glossary of Terms CRS - Customer reservation system PMS - Property management system TTF - Tourism Task Force FOH - Front of House BOH - Back of House GDS - Global Distribution System TA - Travel Agent STP - Satellite Ticket Printers CRM - Customer Relationship Management HRN - Hotel Reservation Network Rev PAR - Revenue Per Available Room

47 Business Strategies Optimise Capacity Utilisation Extend Guest Services Customer Loyalty Program Business Partnerships Custom Tailored Travel Packages Rent/Leasing/Sale of excess Resources

48 Mobility Solutions Packaging Call Centre Interactive TV Data Storage Optimise Capacity Utilisation Map Telco Capabilities Extend Guest Services Smartcards Pre-Paid Cards WAP Wireless Lan/ Bluetooth Broadband Payment Options Content/ Video/Music On Demand Video Conferencing

49 Strategic Alliances Packaged Mobility Solutions Call Centre ISP - content Data Storage Optimise Capacity Utilisation Map Telco Capabilities Loyalty Program Smartcards Pre-Paid Cards WAP Web Hosting (retrieval/reservations) Billpay CRM ASP Kiosk Packaging Call Centre

50 Domestic & Global Network Access Electronic Catalogue Hosting Optimise Capacity Utilisation Map Telco Capabilities Business Partnerships Packaged Solutions Web Hosting Bill Payment Data Storage Broadband POS/ADSL

51 Web Hosting Optimise Capacity Utilisation Map Telco Capabilities Packaging Smartcards Pre-Paid Cards WAP Applications E-catalogue IP Network Online Payment ASP/CRM/ Forecasting Data Storage

52 Broadband/ Video Conferencing Bill Payment Optimise Capacity Utilisation Map Telco and Partner Capabilities Excess Surplus Resources Web Hosting WAP Data Storage SMS Internet Travel Virtual Contact Centres IP Network

53 Business Strategies Grow Market Share Brand Extension/Positioning & Target Markets Acquisitions & Strategic Alliances Establish New Distribution Channels Membership of Tourism Bodies

54 Interactive TV Internet Travel Grow Market Share Map Telco Capabilities Leverage Brand Smartcards Pre-Paid Cards WAP Wholesaler/Reseller PackagingBill Pay Colocation

55 Private Network Service Bundling Call Centre Managed Services Packaging Grow Market Share Map Telco Capabilities Alliances Smartcards Global POPs Web Hosting Scalable Infrastructure

56 IP VPNs Packaged Solutions Call Centre ISP Services Data Storage Grow Market Share Map Telco Capabilities Distribution Channels Smartcards Pre-Paid Cards WAP/SMS Web Hosting Internet Travel Broadband Contact Centre Solutions Contact Centres Interactive TV Electronic Cataloguing

57 Web Hosting Catalogue Hosting Call Centre IVR/Contact Centre Grow Market Share Map Telco Capabilities Member of Tourism Body Click to Call Network Access -TPIPS, ADSL, Argent Billpay Broadband

58 Business Strategies Reduce Costs Join Buying Group, Promotional & Marketing Scheme Effective Staff Training/Flexible Staff Consolidation of Back of House Processes Internet Access & Reservation/bookings Leading Edge Internal Processes & Technology

59 Web Hosting/Colocation Managed Services Call Centre Internet Travel BillPay Reduce Costs Map Telco Capabilities Aggregated Buying/ Promotion/Marketing Smartcards POS/ADSL WAP Messaging Outbound Marketing Contact Centre Broadband Video streaming SMS Franchise Plan Data Storage IP VPNs IVR

60 Web Hosting Voice over IP Call Centre ASP Reduce Costs Map Telco Capabilities Staff Training & Rostering ADSL/Argent E-Learning WAP Wideband IP Video Conferencing IP VPN

61 Web Hosting Bundled/Packaged Services Call Centre Data Storage Reduce Costs Map Telco Capabilities Integrated Processes IP VPN Co-Location ASP Contact Centre Managed Services

62 Web Hosting Packaging Call Centre Bill Pay Reduce Costs Map Telco Capabilities Online Communications ADSL/Argent EFTPOS Content WAP/SMS ASP Firewalls Virus detection Wideband Catalogue Hosting IP VPN Managed Services/ Desk Top Support Kiosks

63 Web Hosting Call Centre IP VPNs Data Storage Reduce Costs Map Telco Capabilities Leading Edge Technology Automating Processes SMS(flight info) ADSL/POS WAP- Reservations & Info Broadband Bill Pay Contact Centre (IVR) VPNs ASP Wireless Lan Smartcards

64 Travel & Tourism Industry (Value Chain)

65 Travel & Transport Value Chain Map our Capabilities Benchma rk Infrastructure and Resources Marketing Material and Collateral Sales Process Deliver the Experience Monitor & Survey Customer Feedback Strategy Formulation Competitive Advantage Leading Edge/Develop New Business Basic

66 Corporate Voice and Data Networks Map Telco Capabilities Basic Contact Centre 13/1800 IVR/CTI IVR/CTI InternetInternet MobilesMobiles Infrastructure and Resources Deliver the Experience Monitor & Survey Customer Feedback Benchmark Strategy Formulation Marketing Material and Collateral Sales Process

67 Map Telco Capabilities Competitive Advantage Benchmar k Infrastructure and Resources Marketing Material and Collateral Sales Process Deliver the Experience Monitor & Survey Customer Feedback Strategy Formulation E-communitiesE-communities Global Connectivity Wireless Lan ASPs - Video on Demand, PMS IP VPN Solutions Loyalty Program KiosksKiosks Pre-paidCardsPre-paidCards StaffRosteringStaffRostering Direct Marketing- Call Centres Direct Marketing- Call Centres CRM Personalisat ion CRM

68 Map Telco Capabilities Leading Edge, Develop New Business Benchma rk Infrastructure and Resources Marketing Material and Collateral Sales Process Deliver the Experience Monitor & Survey Customer Feedback Strategy Formulation GPRSGPRS WAP Applications Managed Solutions & Outsourcing E-Learning, M-Commerce, Interactive web sites, CPFR Direct Marketing- Call Centres Direct Marketing- Call Centres CRM(ASP?)CRM(ASP?) Video on Demand/Broadband

69 Value Chain Benchma rk Infrastructure and Resources Marketing Material and Collateral Sales Process Deliver the Experience Monitor & Survey Customer Feedback Strategy Formulation IOSIOSPCRegisterPCRegister EFTPOSEFTPOS Intranet / Hosting E-communitiesE-communities Global Connectivity Wireless Lan ASPs - Video on demand, PMS IP Solutions Loyalty Program KiosksKiosks Pre-paidCardsPre-paidCards StaffRosteringStaffRostering Direct Marketing MarketingDirect CRM Personalisatio n CRM GPRSGPRS WAP Applications Managed Solutions & Outsourcing Collaborative Planning Forecasting & Replenishment (CPFR) Collaborative Planning Forecasting & Replenishment (CPFR) DirectMarketingDirectMarketing CRM(ASP?)CRM(ASP?) Basic CompetitiveAdvantage Leading Edge, New Business Internet Mobiles Contact Centre 13/1800 IVR/CTI Corporate Voice and Data Networks Video on Demand/Broadband


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