Analysis of Global Dimensions of Business: Travco Group Report

This report provides an in-depth analysis of the global dimensions of business, focusing on the Egyptian conglomerate Travco Group. The report begins with an overview of Travco Group, including its business nature, mission, and current operational countries, highlighting its absence in the United States. It then presents a global economic overview, followed by specific economic analyses of Egypt and Qatar, the latter being the target market for Travco's expansion. The report delves into the economic overview of the travel, tourism, and hospitality industry, discussing its contribution to the global GDP and identifying key trends. These trends include the increasing importance of technology, customer awareness of sustainable tourism, and the rise in spending in the service sector. The report concludes by emphasizing the potential for further expansion within the travel, tourism, and hospitality sector and how Travco Group is positioned to capitalize on these opportunities. The analysis is supported by relevant data and figures from various sources such as the World Bank, IMF, and WTTC.

Running head: GLOBAL DIMENSIONS OF BUSINESS
Global Dimensions of Business
Name of the Student:
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1. Name of company, business nature and brief description of the company
Travco Group is one of the leading travel and tourism, hospitality and real estate
conglomerates of Egypt, with a success story of almost forty years. It offers multiple hospitality
services across Egypt and Middle East. Currently, the company owns and operates in many
countries in the Middle East and Europe offering an extensive range of hotels, resorts, Nile
cruises and various types of tourism facilities, such as tourist transport, low cost airline,
construction and design and large real estate developments that offer luxury summer residences,
and various ground services of highest standard. Total assets of Travco exceed EGP 25 billion
(Travcogroup.com 2018).
2. Mission of the company
The mission of Travco is to maintain the highest international standard in all its products
and services and consistently seek and apply the latest and advanced technologies for enhancing
the operational efficiencies in all types of business ventures. Travco also works towards
diversifying its product and service portfolio and achieve a sustaining and profitable growth in
the upcoming markets (Travcogroup.com 2018).
3. A country where the company is not present (operational)
The company does not sell its products and service in the United States of America.
4. The countries where the company sells
Travco has established its business operations offices in Egypt, Oman, UAE and Jordon.
Apart from the above countries, it offers its range of hotels and services in many countries in

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Europe, such as, Germany, Belgium, Austria, Turkey, Switzerland, The Netherlands, Spain and
China and soon to be launched in Qatar.
5. Global economic overview
According to the report by World Bank (2018), the growth of the global economy is
forecasted to be at 3.1% in 2018 as it saw a rapid and strong rise in 2017. There has been a good
recovery in the global investment, trade and manufacturing, which is expected to be continuing
in 2018 also. The advanced economies are expected to grow at a moderate rate of 2.2% in 2018
as the growth in investment is expected to stabilize. However, the developing and emerging
markets are expected to grow at a rate of 4.5% in 2018 as the level of commodity production and
exports are predicted to increase globally. IMF (2018), highlights that the international level of
output had increased by 3.7% in 2017, which is pushed by the economies of Asia and Europe,
providing a hope for the global economy. Cyclical pick up in the global economic activities are
targeted by the investors and policy makers as it is expected to boost the potential global output
and the benefits are expected to be shared by all the economies.
6. Economic overview of Egypt
Egypt has been experiencing a consistent growth since its annual growth rate of GDP
reached 4.3% in the year 2015-2016. In 2017, the GDP of the nation stood at USD 1.198 trillion
(PPP). Service sector is the biggest contributor in the GDP with 52.5% in 2015, followed by the
industrial sector (36.3%) and agricultural sector (11.2%). The budget deficit has declined from
6.4% of the GDP in 2016 to 5.4% in 2017. As of 2015, 26% of the population lives below the
poverty line and rate of unemployment was 11.3% in the 3rd quarter of 2017. The level of export
was USD 22.5 billion and level of import was worth of USD 50.91 billion in 2017 (World Bank

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2018). The government of Egypt had taken various measures in the past few years to improve the
economic condition of the country. Those measures have resulted in increase in the finances for
the small and micro enterprises through the Social Fund for Development (SFD), increase in the
employment through Labor Intensive Public Works Program, strengthening the Social Safety Net
Project and expanding the energy projects, water, irrigation and sanitation projects, and
improving the transport facilities (Tang and Ozturk 2017). All these reform policies have
contributed significantly in the growth of the economy.
7. Economic overview of the nation that has been chosen as possible markets in which to
install subsidiaries or operative units
Travco Group has decided to expand its business in Qatar. It is another richest economy
in the Middle East with nominal GDP of USD 171 billion in 2017. The nominal GDP grew at the
rate of 3.1% in the financial year of 2017-18. Like in Egypt, the service sector in Qatar is the
major contributor in the GDP with 49.5%, followed by industry (50.3%) and agriculture (0.2%).
In 2017, the level of export was worth of USD 56.26 billion and import was worth of USD 26.69
billion (Gremm et al. 2018). Being one of the richest countries in the world, Qatar provides
immense opportunities for the foreign investors, especially in the service sector. There has been a
good amount of growth in the energy and resource sector, which has pushed the economic
growth in Qatar. The travel and tourism industry of Qatar has displayed 34.1% annual average
growth from 2010 to 2016 (wttc.org 2017). Thus, Travco has chosen Qatar for further expansion
in their business in the travel and hospitality sector due to the high level of potential growth in
that sector.

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8. Economic overview of the industry
Travel, tourism and hospitality industry accounts for over one-tenth of the global GDP in
the recent times. In 2016, this industry contributed more than USD 7.6 trillion in the global GDP
(statista.com 2018). The direct impact on the economy comes through the development of
various services, like, accommodation, transport, attractions and entertainment. This industry
provides the best regional development, which has a significant impact on the overall economy.
As the outlook of the people is changing towards travel and tourism, supported by the rise in
disposable income, this industry has experienced growth and also has great potential for
expansion in the next few years.
9. Global trends in the industry
The travel, tourism and hospitality industry has been experiencing a huge growth in the
last few years. The market is growing from domestic to international. It also leads to greater
competition in the international market, which leads to improvement in the quality of the
services. The technology has become advanced as many services are available online, making it
more convenient for the tourists. The customer awareness about sustainable tourism has
increased, that has led to adoption of sustainable tourism practices by the industry (wttc.org
2017).

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Figure 1: Level of spending in goods and services sectors
(Source: deloitte.com 2017)
The level of spending in the service sector has increased considerably over the years. The
tourism and hospitality industry provides 1 out of 10 of all jobs worldwide (wttc.org 2017).
Figure 2: Contribution of T&T in global GDP, 2017
(Source: wttc.org 2017)

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As per the report of wttc.org (2017), travel and tourism contributed 3.1% in the world GDP
growth by the industries.
Figure 3: Contribution of T&T in the global economy
(Source: wttc.org 2017)
From the above discussion, it is observed that, the travel, tourism and hospitality industry
has great potential to expand further and the Travco Group of Egypt has been roping on that
potential opportunity.

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References
deloitte.com, 2017. 2017 Travel and Hospitality Industry Outlook. [ebook] Deloitte. Available
at: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-
2017-travel-hospitality-industry-outlook.pdf [Accessed 22 Mar. 2018].
Gremm, J., Barth, J., Fietkiewicz, K.J. and Stock, W.G., 2018. Diversification of Knowledge-
Based Industries and Foreign Investment. In Transitioning Towards a Knowledge Society(pp.
101-115). Springer, Cham.
IMF, 2018. World Economic Outlook Update, January 2018: Brighter Prospects, Optimistic
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january-2018 [Accessed 22 Mar. 2018].
statista.com, 2018. Topic: Global Tourism Industry. [online] www.statista.com. Available at:
https://www.statista.com/topics/962/global-tourism/ [Accessed 22 Mar. 2018].
Tang, C.F. and Ozturk, I., 2017. Is tourism a catalyst of growth in Egypt? Evidence from
Granger non-causality and the generalised variance decomposition analysis. Anatolia, 28(2),
pp.173-181.
Travcogroup.com, 2018. Travco Group International : The world's leading travel, hospitality &
real estate conglomerate. [online] Travcogroup.com. Available at:
http://www.travcogroup.com/fact.aspx [Accessed 22 Mar. 2018].

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http://www.worldbank.org/en/publication/global-economic-prospects [Accessed 22 Mar. 2018].
wttc.org, 2017. Global Economic Impact & Issues 2017. [ebook] World Travel & Tourism
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