Tourism And Hospitality Start-up

Running head: TOURISM AND HOSPITALITY START-UP
TOURISM AND HOSPITALITY START-UP
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Table of Contents
Introduction......................................................................................................................................2
Industry background........................................................................................................................2
Opportunity identification in Tourism and Hospitality...................................................................3
Customers and Competitors.............................................................................................................3
Creation of the Start-up organization..............................................................................................4
Identification of funding sources.....................................................................................................5
Marketing strategy...........................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The tourism and hospitality industry is growing at a rapid pace. It is one of the leading
industries in the world at the moment. The industry presently accounts for more than 10% of the
global growth in GDP. In 2015 there were 1.2 Billion travelers internationally. There have been
investments worth more than 29 billion US dollars for startup enterprises in the travel industry
between 2016 and 2017. The report is focused towards analyzing the business prospects of a new
start-up firm in the hospitality and tourism industry. The present industry environment needs to
be analyzed in in regards to the opportunities and threats that it provides to any new start up that
may be present in the industry. The start-up business would be an application and website called,
the New Wave Tours. It would be providing tourists with the best possible tourist hotels with
best facilities at much lower costs. The organization would begin with just a single destination
and would expand to newer markets upon successful progress of business. The tourism and
hospitality industry is now worth 8.8 trillion dollars. It is important to understand that the rapid
development of the industry is also associated with many risks that need to be identified. The
business prospects of New Wave Tours need to be analyzed further.
Industry background
In the last few years various startup organizations have been greatly successful in
establishing themselves in the hospitality industry. One of the most important was AirBnb, the
website that provides accommodation facilities that are different from traditional boarding and
lodging facilities. Rather than providing hotel rooms, AirBnb lets people get rented apartments at
their preferred tourist locations. It directly does business with the owners of the properties.
Another important aspect that is present in the present hospitality industry is the availability of
large funding enterprises like Ant Financial. The organization is now worth more than 100
billion USD (Global travel industry seen 'resilient' despite slowing growth, 2020). Recently a
very important business deal was formed between Ant Financial, Alibaba and Cathay Pacific for
benefiting the travelers. In view of thee important developments that have occurred in the
industry over the last few years, creative thinking becomes an important process. This is because
the industry is highly competitive. In regards to the same some of the hotel booking sites have
started providing entire packages to their customers. At the same time the industry growth can be
measured to understand how the newer ideas are being accepted by the customers around the

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globe. Some of the other hotels have focused on the rising concept of eco-tourism to enhance
their unique selling points. In regards to the new venture, it becomes important that a creative
way of establishing business is not being used by many more competitors. One important idea
can be providing best hotels with the vest views at relatively lower budgets. It is important that a
variety of services are provided to complement one another.
Opportunity identification in Tourism and Hospitality
It is important that a strong opportunity is identified. In this regards, the most important
factor is to closely understand the factors that guide the present industry markets. The identified
opportunity needs to be subsequently covered through effective strategies that can help to
capitalize on the prevailing situation. In this case some of the growing trends of the hospitality
industry needs to be analyzed (Hsu et al., 2016). The present trends in the industry are virtual
communities, sharing economies, online travel agents, guest experience digitization and booming
global tourism. In regards to the same it is important to develop an innovative strategy that can
address all the present and emerging trends that are present in the industry. The key decisions
should take into consideration the fact that there is a need to maintain high levels of transparency
in the present market environments of the hospitality industry. An important opportunity that has
been identified in case of the New Wave Tours is the lack of hotel apps providing optimal
solutions to the customers in regards to their destination accommodation requirements (Zervas,
Proserpio & Byers, 2017). Customers are not getting the best views, rooms and hotels at cheaper
prices. Going on a trip with a company that provides luxury, adventure and great experience at
the same time at a significantly lower price is very difficult to find. New wave would address this
gap and provide customers with the best possible tour experience at the cheapest possible price.
For example- tourists can get a room overlooking the sea at a sea resort for almost half the price.
At the same time the number of package available would be more than that of the majority of the
other hotels.
Customers and Competitors
The customer segments in the travel and tourism industry can be divided into various
segments. According to recent reports the people that tend to travel most are aged between 24
and 35 years (Masset, 2020). These people also have sufficient finances to travel to different
locations. This group is closely followed by the early youths aged from 18 to 23 years. It was

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also found that presently social media marketing greatly influences the buying choices of the
customers in the travel and hospitality industry. The business of New Wave Tours would target
mostly the millennial between the age of 24 and 35 years. These people pay a huge chunk of
their money on flights. The main problem they are facing are in regards to travel is that different
organizations are providing different types of services. The company is focused towards
providing a one stop shop that would address the premium travel needs of the customers at
reasonably lower prices. They won’t have to keep searching for different services.
The most important competitors are the online travel and hotel booking sites such as
AirBnb, Goibibo and Trivago. These are mainly the online portals that are catering to the needs
of the travelers. Goibibo and Trivago are focused more towards providing cheaper hotel rates to
the customers or providing competitive prices to choose from (Madera et al., 2017). On the other
hand AirBnb provides customers with unique experiences by temporarily renting apartments at
the tourist destinations. Most of the competitors are not providing premium services to
customers. They are providing cheap but reliable and services that are only comfortable to a
certain extent. The venture would focus on providing more premium services at rates that are just
slightly higher than the competitors.
Creation of the Start-up organization
The start-up organization would be called New Wave Tours. The business would be a
website that would provide customers with premium services at relatively cheaper rates. The
company would provide various packages. Some of the most important packages offered would
consist of the boarding tickets, the hotel room services, food and the sightseeing add-ons. It can
be seen that the tourism and hospitality industry is facing issue with regards to the things being
advertised and the things that are being provided. Many tourism businesses are not providing
premium services to customers. They are providing cheap but reliable and services that are only
comfortable to a certain extent. The venture would focus on providing more premium services at
rates that are just slightly higher than the competitors. The services would include room with
views, high standard facilities, premium food and better hotel experiences. The facilities are
important as they would differentiate the business from the others. The organization would
provide services that are premium in nature but would cost much less. The first services would
be provided around Sydney. It is important for the business that the process are optimized in

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accordance of the needs of the customers. The cost advantage factor would be important as well
as the add-on facilities that would be provided. The add-ons will include local sightseeing and
other activities. This can either be pre-booked online or even added on during the tours. The
business would depend on providing five star hotel facilities at reasonable costs that are just a
little more than the average tour packages provided by the competitors. The business would
function through a dedicated website and an app.
Identification of funding sources
There would be more than one method utilized for gathering funding. A part of the
capital would be contributed through venture capital. Some venture capitalists would be
approached to fund the business. The business would be app and website based. Hence, there is
more chance of gaining venture capital. A part of the business shares would be provided to the
venture capitalists. Altogether an initial budget of 1,000,000 AUD is required. Hence, venture
capital would be an important funding source to increase the capital. A part of the business
capital would also depend on personal investment. The people involved with the business would
provide their share of investments. Presently, there are 3 main business partners that would be
involved in starting the venture. Moving forward the rest of the money would be gathered
through bank loan. Since significant risks are associated with business loans from the bank, a
relatively smaller portion of the capital would be gathered from the bank sources.
It is important to note that the venture capitalists would come from already established
businesses. Their money as well as expertise would be greatly valued by the organization. They
can provide newer paths for improving the business. At the same time they can bring their
business expertise which can be beneficial for the organization. It is important to view the
opportunity as important for the further development of the organization. The partnership
investment would be important to deliver a large share of the required capital. It is necessary as
the business would need to be based much on the contributions of the people that are involved in
the business process. At the same time it is important to contribute essentially towards the
growth of the organization. Lastly, loans from banks become very important in view of the value
that they can add towards capital accumulation. In the long run, the loan can be a valuable
funding method to sustain the business over a long time.
Marketing strategy

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The marketing strategy would include direct marketing, traditional marketing and online
and social media marketing. It is important that the target audiences are effectively reached
through the marketing functions. The business of New Wave Tours would target mostly the
millennial between the age of 24 and 35 years. These people pay a huge chunk of their money on
flights. The main problem they are facing are in regards to travel is that different organizations
are providing different types of services. Hence, the idea would be to focus on their
requirements. The message would be concise and clear (Ho & Law, 2017). The idea would be to
provide the customers with premium services at very lower rates. This would on the one hand be
quite the same as the other businesses. However, the costs for providing the services would be
much lesser than the rates that are provided by the other services. People can get a room
overlooking a sunset view or enjoy beverages beside a pool. The paper and magazine marketing
would commence in the first phase. In the second phase the social media marketing would
commence. The third phase would consist of the outdoor marketing campaigns. The website
would be launched after this phase. The post-launch phase would take place after this phase. The
marketing would be optimized with the product and the travel activities in and around Sydney.
Conclusion
The business of new wave tours would be very important in terms of developing the
premium tourism sector. It would be important in attracting the millennials towards the tourism
and hospitality oriented premium services. Normally people keep away from the premium
services due to the expenses that are involved. However, the venture is focused towards greatly
reducing the costs that are associated with the premium hotel services to make it more affordable
for people. The idea is to also increase the profit potential of the premium services of the hotels.
The business plan is effective and important in terms of the hospitality industry.

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References
Global travel industry seen 'resilient' despite slowing growth. (2020). Retrieved 19 January 2020,
from https://www.reuters.com/article/us-travel-global/global-travel-industry-seen-
resilient-despite-slowing-growth-idUSKCN1QM250
Ho, G. K., & Law, R. (2017). Finding and Fostering Our Future Tourism Leaders:
Undergraduate Choice in Pursuit of Hospitality and Tourism Higher Education. BEST EN
Think Tank XVII: Innovation and Progress in Sustainable Tourism, 30.
Hsu, A. Y. C., King, B., Wang, D., & Buhalis, D. (2016). In-destination tour products and the
disrupted tourism industry: progress and prospects. Information Technology &
Tourism, 16(4), 413-433.
Madera, J. M., Dawson, M., Guchait, P., & Belarmino, A. M. (2017). Strategic human resources
management research in hospitality and tourism. International Journal of Contemporary
Hospitality Management.
Mao, Z., & Lyu, J. (2017). Why travelers use Airbnb again?. International Journal of
Contemporary Hospitality Management.
Masset, D. (2020). Top Hospitality Industry Trends. Retrieved 19 January 2020, from
https://hospitalityinsights.ehl.edu/2019-top-hospitality-trends
Zervas, G., Proserpio, D., & Byers, J. W. (2017). The rise of the sharing economy: Estimating
the impact of Airbnb on the hotel industry. Journal of marketing research, 54(5), 687-
705.