Executive Summary
Corporate Travel Services Pte Ltd is a leading Travel Management company that ranks among the leading in terms of market base and service delivery in Singapore. Established in 1988, the company has more than 20years of excellence in the fields of travel and hospitality management; the company has diversified its range of products to include online and full service travel solutions to satisfy the diverse and unique travel needs of small sized companies. The range of business that the company receives is made up of 90% corporate travel and the rest of the business is made up of the MICE range (that is Meeting, Incentive, Conference and Exhibition) and Leisure travel.
This marketing plan aims at creating an environment for the company that will allow it not only to adapt to and survive the current downturn of the global economy and its aftershocks to the travel and hospitality industry; but also to grow steadily over the next few decades so as to be well positioned to take full advantage of the expected upturn of the world economy as envisioned by the world leaders who are taking significant steps to achieve a turnaround.
The plan aims to analyze in part the outlook of the industry, the business environment that will likely affect the industry in the near future and the expected tends. Additionally, a SWOT analysis of the company in its current state and environment; and future prospects will be done. Finally, the marketing strategies will be spelt out including the marketing activities and budget involved to fund the various activities that will be carried out.
Introduction
The travel and hospitality industry is at crossroads; for starters, the industry in general has suffered hit after crippling events that have offered little time for recovery for the industry. This events range from the terrorist attacks on the united states on September 11th 2001which used commercial airlines as weapons of terror with devastating loss of life and property, subsequent attacks in London and more recently Mumbai; disease outbreaks and threats such as SARS, bird flu both originating from parts of Asia; and more recently swine flu originating from MĂŠxico and spreading rapidly across the world primarily through long-haul travelers from infected zones. The industry has had also to contend with an explosive increase in world energy prices that threatened to make non-essential travel completely unaffordable.
While these prices eventually came down, an even bigger issue has appeared; the global economic recession. While most business most business sectors have been affected adversely by this situation, the travel and hospitality industry has been among the ones that this effect has bordered on the devastating; for instance, in the wake of 9/11, some airline companies, such as Air Afrique completely ceased to operate. One of the reasons for this is the fact that the sector was yet to complete a recovery from other events that had affected it prior to the recession. Secondly, for both commercial and domestic expenditures, travel and hospitality is one part which many people and/or organization which is considered for the reduction of costs of living or operations; therefore, this tends to sufferer as one of the fields for expenditure cuts.
In view of this, it is of outmost importance for travel management firms to approach the market in a manner and with an attitude that allows them to ride-out the rough season and appear one the other side stronger and prepared to take advantage of the future speculated economic upturn.
Overview; the Travel and Hospitality Management Industry in Singapore
In addition to Corporate Travel Services, there are, as expected, other players in the travel and hospitality management sector in Singapore; these include both small indigenous companies and multinational firms with branches in Singapore. The company has approximately twenty immediate competitors which include Anglo-French Travel Pte Ltd and Fortune Travel Pte Ltd.
The travel and hospitality industry has attempted to react to the various situations that have faced it; this is either through concerted efforts to improve the welfare of all players in the market or as individual attempts for the purposes of survival. For example, the airline industry has stepped up efforts to improve their sales by offering attractive packages; and improving services for their bigger, more reliable classes (especially the business traveler) at no extra cost; and at the expense of other classes such as the traveling family.
On the other hand, many businesses are cutting down on essential travel by reducing either the number of travels, the number of persons in a delegation or both; and downgrading the class of flight.
The current situation has also seen a resurgence of the internet as venue for this industry to promote and sell their service at reduced costs and to the huge and growing online community. While this has favored some sectors of the industry such as the airlines stemming from the fact that they have been able to circumvent some of their costs incurred through outsourcing some of their activities, it has adversely affected the firms which previously received this business, such as the travel agencies.
SWOT Analysis
In the face of such a dynamic situation in the travel and hospitality industry; and which has the potential of harming an unprepared business, it is necessary to carry out a SWOT analysis. This is an important strategic management tool that enables a firm to analyze its internal situation (in terms of Strengths and Weaknesses); and the external forces that may aid or harm the prospects of the firm (in terms of Treats and Opportunities).
Strengths
Experience; among the biggest of the firms strengths lies in the fact that it has over twenty years of experience in the travel and hospitality management industry. During this time, it has managed to train some of the older members of the firm into a formidable force able to carry out their duties with commendable efficiency. More importantly, this time has enabled the creation of a tradition of excellence in service delivery in this sector.
Diverse and quality services; the firm has managed to stay afloat of technological advances; and has diversified from the traditional role of a travel management agency by introducing internet based travel solutions. This is a strength since the internet is the next frontier of expansion in most sectors of business. However, this diversification has not diluted the commitment to quality that the firm has as a tradition.
The firm can boast of a dedicated, well trained, professional and efficient workforce, additionally, every action undertaken as a business activity is guided by a very clear mission statement.
The company has registered consistent performance over its period of operation; and thus all the activities are based on a strong financial base, this would allow the business to survive from one recession to the next without winding-up its operations.
Weakness
The travel and hospitality management business is actually built upon the success of other sub-sectors of the industry; consequently, if these are not doing well, then the management sub-sector also suffers. The need for airline industries to reduce their cost of operations has resulted in development of programs to circumvent the travel agencies and book the travelers themselves to avoid paying commission to the agencies.
Another weakness arise from the fact that the hospitality industry is yet to recover from crippling effects of past events such as terrorism, global epidemics and rising fuel prices. However, bigger than this, is that the industry is more prone to the effects of such unpredictable events arguably than any other sector.
Opportunities
While the rate of growth of business travel has slowed down as a continuation of the trend that started on 2008, the growth is still an opportunity for a company to increase its business. This is in the view that there is growth despite the economic downturn; the best thing now is for a firm to position itself for an expected future upturn of the global economy.
Threats
Competitors: as mentioned before, the scenario in Singapore is that of stiff and sustained competition. Since other players are faced with a similar effect, they are all trying to institute measure to ensure better prospects; for example, Fortune Travel Pte Ltd is working on a plan to reduce their service fee as a marketing strategy.
Technology; the development of the information technology has resulted in the removal of some inconveniences that in the past compelled travelers to procure services of travel management agencies. The traditional travel agency business is being taken away by web-based booking agencies which can reach the customer directly; and at a lower fee. Additionally, some airlines have developed web-based systems to allow online booking of tickets.
The global economy is not doing any favors to the industry; this has affected both domestic and commercial expenditure on traveling.
The recent global outbreak of swine flu and its spread from one continent to the next is a present and clear danger to the industry which is still recovering from previous devastating events, such an outbreak will definitely come with travel restrictions and advisories that will definitely have an effect on the industry. Additionally, the industry is still pegged on global fuel prices which affect it accordingly.
Table 1: SWOT Analysis
Market Segmentation
Market segmentation involves identifying groups of consumers that share specific traits that allow them to be categorized together. An ideal market segment has homogeneity within it and heterogeneity with other segments. Additionally, the segments are actionable; that is, they respond in a similar manner to a stimulus affecting the market [Kotler et al. 2006; Pine 1993; Steenkamp and Ter Hofstede 2002].
At Corporate Travel Services, we have recognized three distinct market segments; these include corporate travel, MICE (that is meeting, incentive, conferences and exhibitions) and leisure travel. Each of these segments is distinct and has different needs; and reliability from season to season.
The corporate travel segment is relatively stable in terms of sales; as mentioned before, there has been a trend of slowdown of growth that started in 2008; however, the NBTAâs prediction that the segment will continue growing in 2009 albeit at the reduced rate is a good sign; this is because most world economies are still writhing from the caustic effects of the global financial crisis. As the world leader institute measures to reverse this recession, the general feeling is that the situation can only get better; this means even greater growth for this segment.
The other segment, MICE, has the benefit of being nascent relative to the business and leisure travel. Consequently, the segment has had tremendous growth in the recent years. This may have slowed in the face of the current crisis; for example, a recent study published by the Meeting Planners International and American Express showed that 7% of 2009 meetings had already been cancelled, and meeting attendance is expected to be down by 5%. Meeting cancellations and fewer attendees also adversely affect the sector. However, this segment is yet to reach a plateau phase in terms of growth; and has immense potential for growth [Sarmone 2008].
On the other hand, the leisure travel segment has suffered heavily from the economic recession; this segment depends heavily on the consumers disposable income. The job and investment loses have reduced greatly the ability of consumers in this segment to spend on leisure, tourism has suffered everywhere. This situation has been worsened by the outbreak of swine flu in 2009 which is yet to be controlled and restriction of traveling to and from affected areas; if the spread is not curbed, the restrictions will only increase.
Many travel oriented businesses are therefore placing their chips on the business and MICE traveler in 2009.
Positioning
Positioning involves creating an image of the firm in the mind of the consumer about the products and services; and the quality offered [Trout and Rivkin 1996]. From the market segmentation, it is clear that industry players have to contend for the business and MICE traveler on the short term in-order to remain in business; the leisure travel segment will take longer to recover due to the lag-phase between the recovery of respective world economies and increased purchasing power of consumers. This lag-phase is shorter for business-oriented travel. There also has been a resurgence of the internet as the ideal venue for sales and marketing for travel and hospitality due to the low costs and wide reach.
In-order to effectively compete in the market, the firm therefore has to present the following, it has to have an image and reputation of reliability and efficiency. The firm also has to cultivate an image of being low-cost (to cater for the cost-containment and/or cost-cutting goals of most companies while at the same time not compromising on quality. Finally, the firm has to portray convenience. The client has to be able to get the services at the click of a mouse the same way they would if they visited the premises.
Marketing Activities
The marketing activities will therefore target mostly the business and MICE travel segments of the sector. As many travel and hospitality management firms step up their contention for a limited market, the issue that has most influence on the choice between two firms offering similar products is image. The client has to feel that they will get the best possible service by making one choice over the other.
The marketing activities will therefore mainly dwell on cultivating a positive image. These include refurbishment of the business premises to reflect a good image; and putting up attractive stands in exhibitions and conventions both in Singapore and around the world. Another activity involves giving sponsored trips to personnel of major media establishments for the purpose of getting coverage on the mainstream media.
The internet is another target; the assault will be two pronged involving both an expansion of the services available online and stepping-up online advertisement campaigns for more visibility.
Marketing Budget
Table 2: Marketing Budget 2009
Conclusion
This is a period of extreme dynamism for the travel and hospitality industry; many events have brought negative effects on the industry. Corporate Travel Services Pte Ltd and indeed all players in the sector have to brace themselves for a rough ride in the future. This marketing plan aims to prepare the firm to capitalize on its strengths to enable it to survive this ride.
Recommendation
The hospitality industry is very susceptible to effects of unpredictable events; this marketing plan is therefore a living document. Any measures recommended by this plan are liable to change to cater for any new issues that may arise during the period of implementation.
References
Kotler, P, Bowen, J & Markens, J 2006, Marketing for Hospitality and Tourism, 4th edn, Prentice Hall, Upper Saddle River (N.J), Chapter 19
Pine, J. 1993, âMass customizing products and servicesâ, Planning Review, Vol. 22.
Semone Peter, âMekong Tourism Office Marketing Plan 2008-2011â, Mekong Tourism Office. Web.
Steenkamp and Ter Hofstede 2002, âInternational market segmentation: issues and perspectivesâ, International Journal of Market Research, Vol. 19, 185-213
Trout, J. and Rivkin, S. 1996, The New Positioning: The latest on the Worldâs #1 business strategy, McGraw Hill, New York.