Operations Management Challenges In The Tourism Industry With Case Study Of Ultimate Travels

About the Business

The report argues about the operations management in the tourism industry along with choosing Ultimate travels as the business for concern. Tourism is the growing industry and contributed the maximum portion in the world economy. As per today’s scenario it had gained popularity over the financial and chemical manufacturing industry as well. Ultimate travels have emerged in the year 1991 and established in Sydney, Australia. It is serving their consumers in the unique manner and even the employees are well trained and energetic which brings about the positive reviews from the customer and believes in word of mouth publicity (Australia, 2017).

The report demanded about discussing the challenges in the selected business i.e. tourism and Ultimate travels. Challenges are the part of business practices and they help in grooming up the business by providing strength to resist the changes and crack out the opportunity out of it. The challenges that the tourism industry is likely to face are changing technology. Though changing technology has made life easier and one click away but the reliability has been lost as the personal interaction does not take place and the things end up virtually. Then is the continuous globalization within the market which is changing the era of the economy and affecting the entire world through its development. The third challenge is changing customer expectations, as the customers are now aware enough so they compare and then select the suitable services, therefore to meet the requirements of customers their demands need to be kept in mind along with the analysis of the customers. The fourth challenge is about the job design including the job description and job specification. The quality management is highly concerned about the management of standard quality so that the trust and faith of consumers retains and consumer loyalty is gained. Lastly global manufacturing challenge has been focussed upon and data from WTTC has been derived. Afterwards the operational management and its factors supporting the success of tourism have been explained. The three attributes have been selected and justified that why are they important for the growth of industry. The three aspects of operational management are goods and service design, resource management and quality management. These three points have been elucidated to create better understanding about the industry and its performance.

Therefore, whole states the importance of operational management in any industry and what challenges are likely to face thus prior preparation has to be done to avoid the discrepancies or at least prevent the situation of loss. The factors of operational management are discussed to develop the deep understanding and bring clarity regarding the industry and the attributes involve in it which affects the growth of the business.

The business selected for the particular assessment is tourism industry. Tourism is an emerging industry all over the world. Various new aspects have been introduced to the field of tourism. There are multiple branches of tourism and another aspect with the growing tourism is the changing lifestyle of the people. People now a days set up the particular budget for the sake of tours and travels. With the growing lifestyle and standard of living the revolution in tourism industry has occurred and changes took place with the passing time. The tourism industry varies demographically; there are options for domestic as well as international tourism. If the though processing is made in institutional terms then airlines, tour and travel companies and agencies could also be opted for conducting the business. It is not only for the relaxation purpose but has also grown out as professionalism, more the facilities and choices better will be the company and its policies which attracts the consumer to build the strong base and make efforts to satisfy the consumer thereby increasing the consumer and business loyalty. Tourism industry contributes around 9.5% in the global economy (Hospitality, 2014).

Challenges and Its Impact on the Business

There are types of tourism but the initial start was from the pilgrimage, making people visit the sacred place and demonstrating them about the holiness of the place and history behind the same. As per the new era different places and concepts have been developed and the tourism sector has been divided in the portions to render tourists with the choices. There exists adventure tourism where tracking, rock climbing, river rafting and many other adventurous and breath taking activities are performed by tourists. Then is the birth tourism, business tourism, culinary tourism, culinary tourism, dark tourism, disaster tourism, doom tourism, drug tourism, ecotourism, genealogy tourism, LGBT tourism, medical tourism, nautical tourism, slum tourism, space tourism, space tourism, sports tourism, virtual tourism, war tourism and wellness tourism (Vacayholics, 2017).

Considering the tourism sector the business selected for that concern is “Ultimate Travels”. Ultimate travels is established in Sydney in around 1991 and for over 20 years they are serving the people for adventurous trips and lowering up the gap and diminishing the global boundaries. The company has collected around 50, 000 loyal and happy customers (Ultimate travels, n.d.). The crew of the company is dedicated enough and fairly handles the customers. The social obligation is also managed and the environment is supported along with the economies of the country. The company also supports two charities and manages it with the amount of tickets and donate it to the charities for the better cause. These two charities are Cambodia and the Kiva Foundation. The good thing that is a point of concern is that the Ultimate travels goes in partnership with the small and family run business to run the market and not with the heavy industrialist and foreign owned companies.

Since the industry is emerging and growing with a good pace and there are likely to arise certain challenges as every industry faces the issues while growing and gaining the heights (White, 2017). Some of the challenges that are likely to arise are as follows:

• Changing Technologies

The world has become small and boundaries are just for name sake. The advanced technologies have made this happen. The emergence of advanced technologies have changed the perspective of people and made the life easier and many manners. The use of internet is the major cause and this has not only helped the business to grow but also helps the customer to analyse the trip advisor and compare the best tourism agencies. They can easily book the trip through the online facilities using the mobile phones, laptops and PC from the home and work place. The use of social media has turned the world into global village. The limitation of changing technology is that the face to face interactions have been lost. People are confined to the visual world and the connections and relations are not maintained. The online relationships are build up which is temporary (Twist, 2016).

• Continued globalization of markets including 1^stand 2^nd world entrants

The globalization is major concern in term of tourism industry, it not only affects the particular countries environment and earning aspect but there are several other factors related to the tourism in a particular country (Ryan ilahi, 2014). The most varying factor is the cultural difference of the countries; it is the point of attraction as well as this is the point that needs to be kept in mind while making the travelling plan and the learning about the tradition and the basic legal norms of the destination country (Button, 2008). The economic factors is the crucial point as tourism is the industry from where most of the foreign exchange is derived and this helps in increasing the foreign money flow in the domestic country which increases the financial position of the country globally. The employment opportunities are also developed with the increasing tourism and many people get there business through tourism (Dwyer, 2015).

• Changing customer expectations

Three Vital Aspects of Operational Management Affecting Business Success

Customer expectation is highly studied section. There are a lot more diversification in the customer behaviour. One cannot predict what is in the mind of the customer or what exactly the consumer is demanding for. There is not always a one thing but there are several aspects running into the head of a person at the single moment and in order to attract the consumer only one single click in the mind of the consumers are needed. The expectations of consumers could be analysed by the way a consumer is undertaking the purchase decision. It also depends on the values and social norms of the person and the locality and surroundings where the customer is from influences the tastes to the great extent. Other than this attitude, perception, trust, belongingness, loyalty and satisfaction level of the consumer also assists in decision the actual expectations of the consumers (Cohen, Prayag & Moital, 2013).

• Changing job design

Job design develops the perspective of candidate and changes the view of the person towards the job. It describes the nature of job and clarifies the specification. The change in technology and adaptability of the employees are also been judged. Tourism is such an industry where relations matters a lot be it the employer and employee relation or the employee and customer relations. But for the betterment of the company employer employee relations need to flourish because the warmth of such relation gets reflected in the service of employees and the similar behaviour is rendered to the consumers as well (Osterman, 2010).

• Quality Management

Quality management is necessary to maintain the goodwill and make the business run for longer period of time. It analyses the financial aspect as well as the services rendered by the employees. Since the consumers are highly aware and they demand for the total quality and start services. The market competition should also be researched upon so that the quality measure is gained and Ultimate travels will be able to set its benchmark to stay ahead of the competitors and take the steps to enhance the quality of business even more (Patiar et al, 2012). 

• Global manufacturing

The study says that global tourism is expanding with the great pace and it supports the economy of the country in particular (Rowe et al, 2012,). As per the report of World Travel and Tourism Council (WTTC) the global travel and tourism generates around double time the job opportunity as compared to the financial sector and five times more jobs have emerged in tourism in contrast to the chemical manufacturing sector. Considering the current status tourism and travels have made 108 million jobs in direct manner and 292 million jobs in totality which is more than any other sector where the people have been employed be it the automotive manufacturing sector, banking, chemical manufacturing, financial and mining sector (WTTC, 2017).  

Operations management is concerned with handling the administration of an organisation in order to enhance the productivity and increase the efficiency of the organisation. The motive of operations management is to effectively convert the raw material and labour into the better goods and services so that the profit maximisation could be gained along with the provision of quality material and customer satisfaction (Anastasia, 2016).

There are different designs in the market that could be chosen to provide variety of services to the customers and take the companies to the new hike. The companies use the standardisation, mass communication, delayed differentiation, modular design and the robust design. From the above designs the important aspect is to know which design is more specific for which kind of service and product. The right decision over right service renders the better results and accomplishment of the business objective.

• Competitive priorities of tourism: Since tourism is a growing industry there are multiple competitors that cut the ways in order to ensure their very own development. The competition in tourism industry has expanded worldwide (Gratzer & Winiwarter, 2012).  As the competition is increasing the preference of the consumers are also increasing, the customer today are aware of the pricing strategy and demand for the better quality at the reasonable prices. Thus, in order to exist in the market the pricing as well as various options need to be made available to the customers (Kastenholz, Eusebio, Figueiredo & Lima, 2012).
• Customer benefit package design: Packaging is the popular aspect among the tourism. The provision of packages is convenient for the customers at the time of travelling. It is easy to store and do not consume the spaces and managing the hygiene level as well. In order to provide efficient packaging the tourism industry provides staff the special training in context of packaging. Also the tourism stakeholders are attracted with the packaging through the marketing and financial assistance. Either the packaging is self-made or the direct sale could be conducted through the tourism stakeholders (Bartleby, 2012).
• Detailed goods, services and process design: Designing decision is of good importance for the success of an organisation. The design varies within the goods, services and process. In the context of tourism the process design need to be selected. The process selected should be suitable to the customer in terms of services and soothing for the pocket as well. The blueprint of the process for tourism is designed by Ultimate travels and using this process customer’s need and wants are developed, the existing services are revised and new development takes place in order to grab the attention of the consumers (Cengage, 2017).
• Market Introduction:Market introduction is the new development of business and stepping in the new stream. As per the tourism industry is concerned it is the growing sector and contributing in the increased GDP of the country. To enter in the new market the business need to adopt some unique facilities and distinct schemes should be launched so that the business could progress and be able to maintain the position in the market area. Ultimate travels could launch the schemes on the honeymoon trips, travels for old age, pilgrim schemes, signature holidays and other business trips by rendering the vouchers and many such options can be chosen for the development of business (Bennett & Strydom, 2001).
• Marketplace evaluation: Marketplace evaluation is the analysis over the real estate and argues over the piece of land. It is undertaken to know the value of the property prevailing in the market. In context of tourism the Tourism Information Commodity Marketplace (TICM) exchanges the information commodities. Research states that the effectiveness is verified by locating, identifying and cataloguing. This check is been made to know whether the leakages exists or not. Leakages are the cost of understanding about the tourism firm and gaining knowledge in regards to the working of an organisation (Morrison, 2013).

Resource management involves the forecasting of the future endeavours. It predicts the upcoming changes and plans the actions accordingly. The resource management also signifies the wise use of resources and appropriate allocation of these resources so that sustainability could be supported. In order to emphasise on the sustainable development capacity requirement planning is needed to determine the labour cost and machine resources so that the objective could be accomplished (Yuzbasioglu, Topsakal & Celik, 2014).

• Forecasting:Forecasting involves the planning in the context of human resources management. For the tourism sector Ultimate travels requires the labour force and employees to serve the customers and ensure the development of the company. Forecasting helps in knowing about the upcoming trend and preparing well in advance to fight the changes and taking the dynamism as a challenge and turning it out in the opportunity. The aspects that should be considered while making the forecast is workforce analysis, workload analysis and job analysis which includes the job description and job specification (Institute of business management, 2015).
• Aggregate Planning:Planning is needed so that the adequate and optimum utilisation of resources could take place. The planning involves the appropriate recruitment and selection of human resources and thereby managing it in an effective and efficient manner by providing the essential training and adopting the adequate retention program to lower the turnover rate of employees. Resource check needs to be made and performance appraisal has to be inculcated. In the tourism industry employees are the first and foremost to visit and serve the tourists and guide them accordingly. They act as the representative for the company therefore the perfect preparation and planning is made so that better gesture and service are delivered to the tourists and making them feel connected so that they might visit again and recommend to the fellow person in their country and thereby initiating the word of mouth publicity over the international boundaries (Inman, 2017).
• Capacity requirement planning: It depicts the process of analysing the cost of labor and machinery resources which are required to accomplish the task. Capacity requirement planning involves the long-term and short-term tactics of change management. Capacity management is considered to be the case specific and focused towards the particular industry (Swinburne, 2017). As for this case the tourism industry has been concentrated upon. The thought analysed after studying the tourism sector is that there are common things but presented in the unique methods and this is because the capacity planning and management is sensitive enough. The visitors and guests are increasing with the enhancing speed of tourism and the changing environment is supporting the resources as well so that adequate development takes place (Pullman & Rodgers, 2010).

The quality management is maintenance of the quality of services rendered by the tourism industry. It is the service base industry and more satisfied the consumer is better will be the quality of tours and travels agency. The betterment of services involves the appropriate conveyance facilities and adequate transport system. It also includes the hotel and room must be affiliated with entire facilities and renders comfort to the tourists. The tourism is directly connected with the hospitality industry so better the hospitality best will be the tourism agency and happy customers always prove to be the asset for the company. In order to analyse the quality gap model is valued, quality control measures are also undertaken to gain the success and generate better ideas for the future development as well (ASQ, 2017).

• The gap model:People set up their expectations by evaluating and comparing the quality of features and characteristics of the goods and services offered by the tourism industry. The gap arises due to the difference between what is been expected by the customers and what actually is rendered to them. The gap model explains the 5 types of models.
• The gap 1 describes the distance between what the expectations of the customers are and what actually the managers think about the customers’ expectations. By undergoing the research this gap could be resolved (Brain mates, 2017).
• The gap 2 elucidates the difference between the perception of the manger and the actual specification in context of customer experience. The organisation is at the view of explaining the service levels which are needed in real term.
• Then comes the gap 3 occurs due to the distance between the experience expectations and the actual delivery experience. The manger monitors the experience of the customers and compares it with standards to know whether the objective has been achieved or not. To what extent the goal has been met and what are the shortcomings that could be concerned about so the gaps are made to fulfil (Blesic et al, 2011).
• The gap 4 is because of the gap between the delivery expectations of the customers and what was actually communicated to them. This is an often practices by the service provider that false promises are made to the customers which breaks the faith and belongingness is lost thereby causing the harm to consumers perception.
• At last the gap 5 is there, which is the difference between customer’s perception towards the experience and the expectation of consumer towards the service. The expectations have been ensured through the word of mouth publicity by the self-experience and this could also be acquired through the past experience of the person. The feedback should be collected from the consumers to know their tourism and travel experience and compare it with the perception they had before the experience. This is to note that whether the perceptions have been converted into the experience or not (Verint, 2009).
• Quality control: The motive of the quality control is to see towards the quality that is been provided by the tourism industry and to check whether the motive of tourism product and services are been fulfilled or not. For the purpose of quality control program the presentation is made and different methods used for improving the service level of the tourism and the products related to the tourism industry are considered as well. The study has been conducted to understand the regulatory body and administration of the tourism sector. Also the research has been made that how will these administrative and regulatory skills will be applied within the organisation. The quality control depicts the measures to be taken in order to know the implementation which might enable the administrative department of tourism to control the discrimination and promote equality among the tourism services and products (UNWTO, 2017).
• Poka Yoke:It is a Japanese word which means to avoid error. It is basically used with the concern of manufacturing process which assists an operator to avoid the mistakes that are likely to take place. In term of tourism the Poka-Yoke is been used to avoid the errors of the human beings and manage the service industry. To avoid the error of human beings the better recruitment procedure need to be taken under consideration. Adequate policies and procedures should be constructed and at the time of induction these formulations must be demonstrated to the employees so that they abide by these policies. The hierarchy should be maintained and tourism must be dealt in a professional manner and the employees need to have adequate knowledge regarding their work so that discrepancies are avoided (Six Sigma Daily, 2017).

Conclusion

Hence, it could be concluded that for the sake of report Tourism industry has been selected along with the Ultimate travels as the business in the similar field. Thereafter the challenges likely to arise in the business are described. There are six challenges that have been discussed in the report. The primary challenge is changing technology which is turning the world into the global village and making the things quick and handy, the only disadvantage is that the personal touch des not exists which delivers the sense of fakeness and authenticity cannot be maintained. The next challenge is continuing globalisation within the market which involves the 1^st and 2^nd world entrants. The customer’s changing expectations is another major challenge that almost every industry faces. The desires and tastes of the consumers cannot be predicted, consumer behaviour is critical thing to understand it in entire manner. Then comes the changing job design, job design is connected with the job specifications and job description. Tourism has turn out to be the growing industry in term of profession and the employees should be trained enough to entertain the consumers and derive the customer satisfaction. The quality management is another big challenge which is almost demanded as the awareness has been created and people now demand for the better quality. The last challenge is global manufacturing which involves the step to determine the position of tourism and how much does it contributes in country’s GDP and in coming years what will be its position internationally. Thereafter the operation management has been investigated where 3 areas has been selected that contributes in the success of tourism and the reason has been quoted as to why they have been selected as an important operational management factor. These three areas of deriving success are goods and service design, resource management and quality management also there attributes have been briefly explained to justify the topic even better and how they impact the tourism.

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