Travel and Tourism Industry Analysis – Term Paper

Tourism industry challenges

The major challenges faced by First Choice Holidays PLC are majorly concentrated on the transitions occurring in new modern tourism practices.

Laws and Regulations

First Choice Holidays PLC has to abide by regulations and laws when posting goods and services online like Trade Description Act, which states that it is unlawful for any company to make any false statement about goods and services they are offering (Raluca, 2013). Besides, First Choice Holidays PLC must comply with E-commerce regulations that give consumers the remuneration right for goods and services purchased (Raluca, 2013). Privacy concerns are another challenge for First Choice Holidays PLC. Once customer’s book holidays with First Choice Holidays PLC, they are uncertain whether to trust the company or not. This is due to the high insecurity level online and fraud that capture customer’s personal details and data. First Choice Holidays PLC has to be prepared in case its website is attacked or goes down due to malicious hardware (Raluca, 2013). Thus, if First Choice Holidays PLC website is cyber attacked or infected, it has to be shut down while protecting data and personal details of consumers.

Price

First Choice Holidays PLC main objective is to become a market leader in this sector. First Choice Holidays PLC has lost its pedestal to companies like Lastminute.com, TravelRepublic, and Thomas Cook, due to higher prices means customer make their holiday choice by comparing prices and packages features (Christensen, 2016). Therefore, consumers track cheaper deals, making it their priority rather than focusing on brand loyalty. Most competitors monitor First Choice Holidays PLC prices on the internet and use its pricing policies and techniques to remain competitive (Plunkett Research Ltd, 2007). Price war in this sector remains a major challenge, as First Choice Holidays PLC has to offer better deals and put lower and discounted prices to outperform its competitors.

Place

First Choice Holidays PLC must ensure it has maximum access to different search engines to increase the number of customers. This also increases its visibility but the more it goes online, it gets more competition as its competitors also strives to be on the first pages of search engines (Christensen, 2016). First Choice Holidays PLC is also challenged the negative feedback and comments on its blog and Facebook (Christensen, 2016). Another challenge is the lack of internet access that consumers face due to lack of computing skills, low confidence, affordability, and geographical location. Thus, First Choice Holidays PLC cannot fully target its customers (Christensen, 2016).

People

First Choice Holidays PLC need to review its website regularly to ensure it is secure and protected due to internet marketing fraudulence (Christensen, 2016). The maintenance procedure needs knowledgeable and reliable information technology experts adding extra costs. Another challenge is the management of approximately 19 million consumer’s profiles, which must be kept up to date (Raluca, 2013). Thus, it becomes difficult to personalize and manage the experience of each user.  Another challenge is that First Choice Holidays PLC must keep up with technological and market changes to enable all departments to be able to communicate effectively and easily (Raluca, 2013).

Process

Though the booking process is efficient, customers have low confidence levels based on payment security. This affects the sales. Besides, if First Choice Holidays PLC websites trafficked, the booking process may become slower, therefore, impacting customers negatively due to disintermediation, intermediaries are removed once the booking process is made, First Choice Holidays risks losing face-to-face interaction with customers. (Christensen, 2016)

Promotion

The main challenges in promotion involve the management of customer’s comments and feedback. First Choice Holidays need to carry out market research to identify changes and evaluate customer needs and wants. The entire process of collecting and evaluating customer’s feedback is unprofitable and time-inefficient (Raluca, 2013). Another challenge is the increasing use of emails as its users commonly avoid receiving the advertisement and promotional materials on their emails. Thus, this limits First Choice Holidays chance to communicate to clients and attract more customers. (Raluca, 2013)

MANAGING OPERATING CAPACITY – SUPPLY AND DEMAND IN TOURISM

The increasing competition among tour operating companies is a great challenge to First Choice Holidays. First Choice Holidays has to respond by adopting new strategies to ensure prosperity and survival of the company. Although capacity management in First Choice Holidays has evolved, its success is based on four business segments; online destination services, activity holidays, specialist holidays, and mainstream holidays (ACCA, 2010). Perishability is a major factor since when the business segments are not sold, the company loses revenues, and this cannot be recouped. Managing operation capacity, therefore, involves maximizing operational costs effectively (ACCA, 2010). First Choice Holidays does not have a fixed capacity, and this can be changed based on demand. The variables that the company use in managing capacity is the price or occupancy mix, which allows it to determine the maximum guest, mix. Demand for using First Choice Holidays varies making it difficult to predict demand (Knowles & Westcott, 2014). When managing operation capacity, a balance between price and occupancy rate should be achieved and lowering prices to increase capacity rate may not be a solution. Contingencies in supply and demand have influenced the ability of the company to maintain quality standards. With no ability of First Choice Holidays to alter capacity, it has to deal with the increasing fluctuations in demand (Plunkett Research Ltd, 2007). The supply of online destination services, activity holidays, specialist holidays, and mainstream holidays is higher that demand and the demand is not compatible with the supply or may be inferior to the demand needs in the market (ACCA, 2010). Thus, the company needs to analyze the situation to determine what causes excess supply over demand.

To manage demand, the company has to hold inventory while anticipating demand, alter capacity, and influence demand by discounting and maintaining rates.

PLANNING AND PROCESSING THE PACKAGE HOLIDAY

With “All inclusive” transfers, flights, holidays, First Choice Holidays usually plan a getaway vacation for customers at affordable rates. Customers can sit back knowing they saved money and book directly. First Choice Holidays’ holiday package stock its own adventure course with all ingredients customers will need in the course of the holiday. For example, during May, First Choice Holidays offers holiday packages when the temperature in Balearics start increasing, meaning the prices are inexpensive and seem like off-peak rates to customers (BBC, 2011).

MARKETING OBJECTIVES FOR A BUSINESS

Below are the marketing objectives of First Choice Holidays:

1.      To be the best tour operating firm in the world

2.      To maintain a steady and positive growth yearly

3.      To improve the performance of the company by making significant advances in travel related financial services, in independent travel and grow revenues.

4.      To increase sales by 25% within 19 months and grow market share

5.      To experience an increase in the number of customers and turn them into loyal and long-term clients

6.      To discover customer needs and ensure the company provides the preferences and tastes of the customers.

7.      To enter new markets both locally and internationally.

8.      To fosters a healthy competition environment in the marketplace with its competitors like Thomas Cook.

CHANGING FACE OF THE TOUR OPERATING INDUSTRY

There has been a change in the patterns of tour operation industry globally, how it might lead to a sustainable livelihood, and how its impacts might be mitigated and managed. During the turn of 21st century, people planning a holiday had to contact a local travel agent or rely on trusted recommendations from other people to set for the holiday (Bearne, 2016). Today, a breakthrough in technology has enabled travelers to book their hotels and flights online. This has made more people to travel than ever. Thus, the world has become a DIY generation of travelers who book and manage travel online (Bearne, 2016).

EXAMPLES OF MANAGEMENT STRATEGIES

Despite the increasing competition in the tours operation industry, it is critical to use different platforms in engaging customers to book more every season. First Choice Holidays uses the following management strategies to grow and develop its market base:

1.      Encouraging customers to comment and give positive feedbacks

According to research, approximately 90 percent of clients’ buying decision is influenced by reviews online, therefore, First Choice Holidays use follow-up email to encourage clients to post reviews about their experiences in the company’s site (Evans, Stonehouse and Campbell, 2012).

2.      Keeping customers engaged with video emails.

First Choice Holidays use visuals to increase a customer’s engagement. The company also considers using YouTube videos of the tour activities or a simple, welcoming message from the lead tour guide or the owner (Kozak and Baloglu, 2010). This is an excellent opportunity for First Choice Holidays to create a great image.

3.      Enhancing activity descriptions on your website

First Choice Holidays has clearly fleshed out the activity description on its website. It also has a descriptive copy on its website that entices travelers to make bookings with the company. The site highlights the most booked tour activities with quality photographs beside each description to make potential customers eager about the activity (Evans, Stonehouse and Campbell, 2012).

4.      Building brand existence on Foursquare

First Choice Holidays use Foursquare listing in adding the company’s logo, updating details on the operating hours and other business details including special offers for new and frequent customers. Using foursquare for check-ins help promote the company since most travelers on vacation use their mobile devices to check-in to locations (Kozak and Baloglu, 2010).  Foursquare also enables First Choice Holidays to post featured tours, tips on events and recent awards won by the business making it the best place to advertise your business.

7. Offering free information on your company’s website

First Choice Holidays provide free content to entertain and attract site visitors. Through the company’s subscriber list to its main website, there is a guide about travel tips and key destinations that can be downloaded free (Kozak and Baloglu, 2010).