Analyzing the Potential of Travel and Tourism Sector in UK

The provided report highlights the potential of the travel and tourism sector in the UK, with a plan to start a new travel agency providing various services. A personal SWOT analysis reveals weaknesses in analytical, research, and negotiation skills. To become successful, entrepreneurs in this sector must take risks, provide differentiated products, and be innovative. The report also references several books, journals, and online sources that support the importance of entrepreneurship, innovation, and sustainability in the travel and tourism industry.

Travel and
tourism
entrepreneur
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TABLE OF CONTENTS
Introduction .....................................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Skills required to become a successful entrepreneur ............................................................3
1.2 Analysis of strength and weakness .......................................................................................5
TASK 2 ...........................................................................................................................................5
2.1 Successful entrepreneur from travel and tourism industry and his business development
strategy ........................................................................................................................................5
2.2 The success of Thomas Cook's business ..............................................................................6
TASK 3............................................................................................................................................6
3.1 Sources of funds for proposed travel agency.........................................................................7
3.2 Potential for success in travel and tourism context................................................................8
3.3 Effective business plan .........................................................................................................8
Conclusion ....................................................................................................................................10
References......................................................................................................................................11
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INTRODUCTION
Travel and tourism industry of the world is highly potential and reflects huge
opportunities for growth and development. Further along with high growth rate, the industry
also experience very tough competition. Thus, it is not easy to become a successful entrepreneur
in this industry and lot of skills, time and efforts are required in aspect of the same. This report
includes some of the major skills required to become successful entrepreneur in travel and
tourism industry. It also contains various stages of strategy of my own business such as
marketing and sales, operational plans and financial projections.
TASK 1
1.1 Skills required to become a successful entrepreneur
Every entrepreneur is required to have some sort of skill set which assist in making the
business successful. Entrepreneurship can be defined as the process in which an individual
develops a business from ground to up. Further it starts with idea generation and then turning the
same into a profitable business (Chambers, 2009). Thus, it can be stated that Entrepreneurship is
also important for the growth and development of country and its economy. I want to start up my
own travel agency where I would be providing various kinds of travel related services. In order
to become a successful entrepreneur some of the skills which I will require are mentioned below
as:
Skills
required
Description Rank/Rating
Time
management
skills
This skills will support me in completing my activities
and task on time. This will help me in managing my work
effectively and efficiently
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Leadership
skills
It is also required by me to have leadership skills as this
will assist me in maintain and manage team of people
easily. Along with this leadership skills will also help me
motivate and direct people at the time of recruitment
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Research and In order to become successful, I am required to have 7
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analytical
skills
Research and analytical skills which will help me to
understand need and demand of market and then deliver
services according to the same. This skills will also help
me collect and use information related to market in
effective manner. Further it will assist in making the best
decisions.
Decision
making skill
To start my own business of travel agency, I will also
require to decision making skills. One can become
successful only when he/she take correct decisions on
time. This will help me in every single stage of the entire
decision making process.
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Planning and
organizing
skill
These skills will help me to plan my activities properly
and organize things in my new business.
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Communicatio
n skills
It is one of the most important skills which are required
in service industry. Effective communication skills will
help me to communicate mu ideas and messages with my
team mates and will also assist me in understanding the
need of customers. Further these are termed as one of the
most important skills because if my communication is not
proper then I wont be able to deliver my ideas and
opinions to other and then it will results in failure of my
business.
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IT skills In modern era, IT and numeracy skills are also important
because it will help me in design my online website and
carry out online promotion in best possible manner.
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Traits required
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Traits required Rank Importance of the skill
Risk taking 8 To start a new business in highly competitive
industry is very risk. Therefore, one has to be a
risk taker in order to become successful. The risk
taking is considered as a reward as it will
provide me with enormous opportunities for
growth and development of my new business.
Motivator 9 It is not easy to start a new business as an
individual faces many issues and challenges at
initial level. Being a motivator will assist me as
well as my team mates to fight and overcome
those challenges. I am a great motivator and I
can influence and encourage people in my team
very easily.
Ambitious and hardworking 9 A lot of time and efforts are required to turn an
idea into successful business. Thus, it will be
also required by me to have traits such as
ambitious and hardworking.
Perseverance 8 During the initial stage I will find lot of
challenges and difficulty. Perseverance will help
me to carry out my task and activities despite of
having all these challenges and difficulties
Tenacious 7 This skills will help me to hold my patience in
hard times. Along with this, it will also assist me
in not getting frustrated easily.
Creative 8 Creativity will help me to develop new and
creative ways of promoting and selling my
services
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Innovation 9 It is very essential for me to be innovative
because it will help me in getting competitive
advantage over other market players by
providing unique and innovative services
1.2 Analysis of strength and weakness
Some of my core strengths and weaknesses are mentioned below as:
Strengths
 One of my core strength is that I am a
good leader and I can easily manage
and lead team of people
 I am a good motivator and I can
encourage people to give their best.
 I also have effective communication
skills
Weakness
 I lack analytical and research skills and
it is one of my major weaknesses
 I am not having negotiation skills and
which can create barriers in dealing
with suppliers
Opportunities
 The travel and tourism industry is high
potential and I have an great
opportunities for growth and
development.
 I also have opportunity to gain
competitive advantage as my services
are unique and innovative
Threats
 The intense competition among
businesses in travel and tourism
industry is one of the major threat for
my business
 Unstable economic conditions is also a
big threat as downfall in economy will
encourage people to lower down the
use of travel related services
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TASK 2
2.1 Successful entrepreneur from travel and tourism industry and his business development
strategy
Thomas Cook is one of the most renowned company in the travel industry and all the
credit goes to the mission and efforts of Thomas Cook. Further he was born to John and
Elizabeth Cook on 22nd November 1808. he was the first child to them and was named after the
father of Elizabeth. When he was three year of age, his father died and her mother remarried to
another guy in the same year. At the age of 10, he started working for a local market gardener as
an assistant. During his childhood days, he also provided services as a cabinet maker. Starting
from his initial days of work, he was very hardworking and dedicated (Evans, Stonehouse and
Campbell, 2012). In addition to this, he was very religious man and was against alcohol. He
always promoted education and said that life of people can be improved easily if they drink less
alcohol and get better edification. Thomas cook has adopted human behaviour approach of
management in which he used to considered that management is getting things done by people.
Further he always tried to understand the behaviour of all its employees. Cook always looked
forward to motivate his employees in order to increase their productivity and efficiency. In
terms of management, he used to manage all the things such as finances, marketing and human
resources by his own.
Thomas Cook was walking along the roadside of Leicester and suddenly an idea clicked
in his mind to merge the power of locomotion's and railways and create a social reform. Further,
in one of the meeting, he suggested that a special train should be arranged to carry carry the
supporters of Leicester to Loughborough for a meeting (Hollick and Braun, 2005). This idea was
appreciated from all the people who were preset in the meeting. The train was arranged
successfully and after then Thomas never looked back. After this, many trips between Leicester,
Nottingham, Durby and Birmingham was arranged and this laid foundation of his future
enterprise. In the year 1845, his first commercial venture took place and when he arranged trip to
Liverpool.
2.2 The success of Thomas Cook's business
After 10 years of establishment, in the year 1855, Thomas Cook company was growing
really well in Britain and was expanding its operations with a great speed. Thomas was very
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dedicated in expanding its operations to areas of Europe (Lordkipanidze, Brezet and Backman,
2005). In the same year there was one international exhibition held in Paris and Thomas tried to
grab this opportunities by influencing the companies to allow him some concessions. This
offered was rejected by the companies and there was only one route for Thomas which was
between Antewerp and Harwich (Thomas cook, 2015). Thomas accepted this route and in the
same year he escorted tourist to Europe for the first time. At the end of tourist season in 1863,
Thomas took almost 2000 tourist to destination such as Paris.
One of the key attributes in traits which I have personally learned from Thomas cook is
risk taking. In very stage he has taken risk and this is the only factor which has provided him
with such a kind of success. Planning a train from Leicester to Loughborough was a risk. In
addition to this, his first commercial ventures was also very risky and he was also not having
adequate support from other people. After his success in domestic market, he tried for
international expansion which was also very risky as Thomas was not having idea about the need
and market trend of new country. He never gave up and it was one of the most influential part of
Thomas cook. The skills which have contributed to Thomas success includes innovative,
confidence and his vision. For instance the idea which he got to start a train while walking on the
roadside is an example of how innovative he was. On the other hand, when his offer regrading
exhibition in Paris was rejected, he was not demotivated and its was his confidence level which
helped me to look for another alternatives rather than focusing on rejections. Another skills was
his sound vision that is never restricted himself and his operations and always looked forward for
growth even after getting successful. Thomas cooks mostly raised funds with the help of two
major sources which are share capital and bank loans. These were the two major sources which
he has used for expanding his business.
On the other side of this, Thomas cook also faced lots of issued and troubles due to lack
of his financial capabilities. Further he was having lots of debts, loans and at one stage he was
unable to manage all these things and in the end he became bankrupt.
TASK 3
Goals and objectives of businesses
I am planning to start a travel agency agency in UK and one of the main reason behind
this is that travel industry is very potential and has large amount of opportunities for growth and
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development. My ultimate goal is to become one of the leading travel agent. Some of my core
objectives are mentioned below as:
 To provide world class services to customers
 To gain high degree of customer satisfaction
 To grow my business annually with a rate of almost 10%
 To open a new branch in London within a tome frame of 6 months
 To provide travel services to 1000 people in the initial year of my business
 To expand my operations in the part of Europe and Asia within next 2 months
3.1 Sources of funds for proposed travel agency
Name of travel business-
Comfort travels- we believe in providing quality services
Nature of services
I am planing to open a travel agency in London from where I will be providing various
kind of travel related products and services. The services will include booking of air tickets,
railway tickets, arranging tours, providing various kind domestic and international tours
packages etc. The process of this will be that I am going to create my online website and the will
promote my services over internet and through advertisement through newspapers, Television
etc. Other than this, I am going to tie up with various kind of hotels, agencies, and food
providers. This will help me to ensure proper arrangements of food, accommodation and
transportation facilities in areas where I am providing tours services. The target customers will
be students, business class people and people who love to travel. I will also create my official
page on social media such as Facebook. In addition to this, I am going to promote my services in
colleges and universities. Promotion will be also carried out in companies and shopping malls.
One of the major benefit to customer is that the services will be entirely different from
what the other travel agents in UK are offering. Further there will be an option of “make your
own tour” which will be made available. As per this option, all the food, accommodation,
transportation and other facilities will be selected by customers. On the other hand, the company
will have many benefits from this business. It will assist in getting competitive advantage and
will also support in increasing the sales and profitability.
Sources of funds
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In order to start my own business of travel agency, I have many sources of finance
available which are mentioned below as: Owner's capital- I can invest my own capital to start up the business. Further I can also
borrow money from my friends and family members for the same. The benefits of
owners capital is that an individual is not required to pay any kind of interest them
(Mamaghani, 2009). Other than this, there is no pressure to repay the amount in given
time frame. Thus, it can be a very good option to raise funds. Bank loans- There are many banks in UK which can provide me required finance.
Taking loan from bank is also termed as one of the best and easiest way to raise funds. In
case if I take any kind of loan form bank, then I will be required to pay the sum back
after a specific period of time. I will be also required to pay interest on the same which
every banks charges.
 Venture capital's- Venture capital is the one in which a third party invest money in your
project. There are many companies and individual's in UK which provides venture
capital for businesses (Kayar, and Kozak, 2010). The companies charge very low rate of
interest at the initial stage, when new firms try to establish themselves. After
establishment, they starts charging very high rate of interest which is one of its major
disadvantage.
The best sources of finance for my new business will be bank loan and owner capital.
The reason behind this is that, I wont be required to take large finance from bank and the interest
rate will be very low for the amount which I am going to raise from bank.
3.2 Potential for success in travel and tourism context
My idea for opening a new travel agency will be very successful and one of the main
reason behind this is that my concept is very new and unique. It has been observed that the
number of travellers in UK has increased from 2 million to 3.48 million in the year 2014
(Spenceley, 2012). Thus, from this fact it can be easily justified that there are huge opportunities
for growth and development. I am also going to launch an online version of my travel agency as
in the last five years there has been 73% growth witnessed in the online booking of tours.
Other than this, in terms of pricing it can be stated that at initial level, the prices will be
very low. The advantage of this is that it will help me establish in market and have a good
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customer base. Some of the main factors which will help my business to become successful
includes unique services, low price and accurate services.
3.3 Effective business plan
The business plan for my new business is mentioned below as: Business concept: In my travel agency I will be offering services such as “make your
own tour”. It has been identified that there are huge opportunities for growth and
development in travel industry if a business offers unique products or services (Caro and
Roemer, 2006). The room, accommodation, transportation and other facilities all will be
chosen by the guest himself. Other than this, I am also going to provide horror tourism
and adventures tourism. This will help me to satisfy the needs of people who love to
travel at scary places. The benefit of this there are very few agents which provides such
kind of services and thus, it will support me in getting competitive advantage. Products and service characteristic- The services provided by me will be going to fast
accurate and of high quality. It has been observed that one of the best way to retain
customers in travel industry is by providing them with fast and satisfactory services
(Ateljevic and Page, 2009). Thus, I will make sure that my services will be fast and
accurate. All the destinations in UK as well as outside are well defined and proper tie up
will made.
 Market potential and competition- The market is very potential and it contributes almost
9% of the total UK's GDP. In the year 2013, the revenue of travel industry was £125.7bn
which is quite good. In terms of visitors, the country is eight largest international tourism
destination (Tourism alliance, 2015). Some of the major objectives of people behind
choosing UK as a destination includes relaxing, sightseeing, visiting beach etc. The
competition in market is very intense as the industry consist of well established small and
large travel operators. All these operators are really performing well and it will not be
easy for me to attract customers and gain competitive advantage.
 Sales and marketing- I will be carrying out marketing and promotional activities on social
media sites such as Facebook and Twitters. The reason why have selected social media
marketing is that it is very cost effective and efficient way to market my products and
services. On the other hand, I will be also displaying ads on newspapers and magazines in
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order to make people aware about my services. In terms of sales, I will be offering and
selling services online. I will also open a physical store from where I will b dealing with
sales and marketing. Management- I will be hiring 10 people which will work as a supportive staff. Out of the
total 10 employees 60% will be experienced one which has an good experience of
working in travel industry. I will be using participative approach in which I will always
try to encourage the views and opinions of others. At the initial stage there will b one
staff member who will take care and manage finances and on the other hand one person
will manage marketing and sales. Rather than keeping a manager, I will manage all the
things by my own.
Operational plan
There are some major steps in operational plan for my new travel agency which are
discussed below as: Identification of clients requirement- The first stage in operational plan will consist of
identifying the need and demand of customers (Hjalager, 2010). The destination, choice
of food, budget everything will be taken into consideration. Identifying the need of
customer and then delivering services according to them will assist me in getting high
degree of client satisfaction which is very essential to make a business successful. Pricing- after identification of the requirement, price of the entire tour package will be
defined. In this stage, I will be required to ensure that the price and clients budget should
be matched otherwise he will choose the services of other tour agencies. Planning the tour and booking tickets- If the client is satisfied with the pricing, the tour
will be planned and booking the tickets will be done. In addition to this, the hotels,
transportation and everything will be booked in advanced so that clients do not have any
kind of difficulties when they reach their destination. Communicating the rules and polices of tour- Before implementing the plan, all the rules
and polices will be communicated to client. This will assist in eliminating the chances of
conflicts between agency and customer.
 Implementation of plan- In the last stage, the entire plan will be implemented and the tour
will begin as per the schedule (Peters, Frehse and Buhalis, 2009). After the beginning of
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tour, I need to take of the fact that quality and accurate services are provided to the
customers during the entire tour. I will be also taking feedback and reviews from them.
Financial projection
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Projected cash flow statement
Projected Cash flow statement
Particulars Pre operating year Year 1 (£) Year 2 (£) Year 3 (£)
Cash Inflow
Opening balance 0 3200 26400 75040
Cash sales 0 432000 518400 622080
Bank Loan 150000
Owner's capital 200000
Total Cash Inflow 350000 435200 544800 697120
Cash outflow
Fixed Assets 200000 0 0 0
Infrastructure & designing 50000 0 0 0
Market research 10000 0 0 0
License and registration charges 1000 0 0 0
Cost of services 0 216000 259200 311040
Advertisement & Promotion 20000 6000 6300 6615
Website maintenance 10000 5000 5250 5512.5
Office & Administration
Expenses 20000 5000 5250 5512.5
Salaries and wages 0 150000 165000 181500
Interest 0 15000 10000 5000
Misc. Expenses 30000 6000 6600 7260
Tax 5800 5800 12160 19928
Total Expense 346800 408800 469760 542368
Closing Cash Balance 3200 26400 75040 154752
Projected Profit and loss account
Projected Profit & Loss Account
Particulars Year 1 Year 2 Year 3
Sales 432000 518400 622080
less: COGS 216000 259200 311040
Gross profit 216000 259200 311040
Less: Operating Expenses
Advertisement & Promotion 6000 6300 6615
Website maintenance 5000 5250 5512.5
Office & Administration Expenses 5000 5250 5512.5
Salaries and wages 150000 165000 181500
Misc. Expenses 6000 6600 7260
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Total operating expenses 172000 188400 206400
Operating profit 44000 70800 104640
Less: Interest 15000 10000 5000
PBT 29000 60800 99640
Less: Tax 5800 12160 19928
Net Profit 23200 48640 79712
CONCLUSION
From the above report, it can be concluded that the travel and tourism sector of UK is
highly potential. Further I am planning to start in new travel agency in the country from which I
would be providing various kinds of travel related services. With the help of my personal SWOT
analysis I have identified that I am lacking analytical, research and negotiation skills which has
become my major weaknesses. Other than this, it can be also concluded that in order to become
successful entrepreneur in travel and tourism sector one has to take risk, provide some
differentiate products and needs to be very innovative.
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