Continental Travel Business Plan

Executive Summary
The Harvard Branch of Continental Travel is located 30kms east of the CBD on the busy main shopping strip in Harvard and has been operating for only 6 weeks and is still very new to the area. The Branch is open from 9:00am to 5:30 pm each day, and closes at 6pm on Fridays and it is not open on the weekend. The customer demographics represented in the suburb, are from low socio-economic through to high income, with the two key demographic groups that characterize the area, young families with toddlers and primary school aged children also older families with adolescent children in their mid teens to early twenties. There have been a number of new facilities recently built catering for the needs of these two groups and for the growing population of Harvard which include a new child care center for the younger families, a new retirement village for the aging population and a new multi level shopping center at Harvard Park consisting of 500 retail outlets.
The predominant ethnic profile of Harvard is Anglo-Australian with a significant percentage of first, second and third generation Greek and Italian-Australians and more recent, the profile has expanded to include an increasing proportion of new immigrants of Chinese and Vietnamese origin.
The Harvard Branch had been staffed by personnel from the neighboring branches with no previous working relationship consisting of long-serving employees with an average 7 years experience and of short-term staff. All the staff have Anglo-Australian background except for one of the Part Time Travel Associates who is of Greek origin. Although the attrition rate within Continental's Branches is within the average range, there has been a slight increase in turnover over the last 2 months, in particular with the more junior members of the team. Recent satisfaction surveys indicate a 65% staff satisfaction level and 54% staff advocacy.
At present, Harvard does not have a customer base although some of the Senior Travel Consultants have brought a number of their clients over to the new branch with them; this is still insufficient to sustain their own targets, let alone the performance of the entire branch. Most travel inquiries received to date all appear to be interested in domestic holidays, with some of the inquiries made for international travel destinations.
1. Situation Analysis
Australians have been known to be avid travelers and it is not uncommon to find that most Australians have lived overseas at some point in their lives, with the majority traveling overseas for a vacation at least once every 3 years with those within the 20-35 age category undertaken international travel at least every 1-2 years.
The terrorist attacks on September 11,2001, caused significant turmoil in the travel industry especially on international travel and within Australia the effect of this promoted an increase in domestic tourism. The sales of travel insurance also increased whereby Continental made a significant loss in the 6 months after 9/11across all its operations, with a 20% downturn in sales.
The collapse of Ansett Airlines impacted greatly on the domestic tourist market as it reduced the capacity of the domestic airline industry, which caused a loss in confidence in the domestic airlines. The war in Afghanistan and the Bali Bombing, the 2004 Tsunami in Asia brought about further decline in international travel, particularly to the Asian region being one of the premier tourist destinations for Australian travelers. The confidence of Australians to travel abroad is expected to make a very slow recovery given these events making it very difficult for travel agencies to meet their sales targets and still promote growth.
The staff profile within Harvard Branch needs strengthening, as the teams have not worked together previously. The staffing mix needs to reflect the culture and demographic of Harvard where most of the population are of Italian, Greek, Chinese and Vietnamese origin. At the present all staff is of Anglo-Australian, except for one of the Part Time Travel Associates who is of Greek origin. Although the attrition rate within Continental's Branches is within the average range, there has been a slight increase in turnover over the last 2 months, particularly with the more junior members of the team. Recent satisfaction surveys indicate a 65% staff satisfaction level and 54% staff advocacy.
2. Marketing Summary
Typically the travel and tourism market is normally separated into two main categories, business and leisure travel. Each would normally contribute about 45% to total revenues. The remainder is generated from combined business/leisure trips. The market is further separated into domestic and international travel. Domestic travel accounts for approximately 70% of industry revenues. Business travel can be divided into two categories, the medium to large corporate account, and the small independent businessman. Leisure travelers are classified according to the types of trips they take, income, or age. The four primary leisure travel groups are:
1. Adventure, Special Interest, R&R, Honeymoons & Sightseeing Trips.
2. High-Income Travelers.
3. Budget-Conscious Travelers.
4. Families, Students & Seniors.
3. Market Demographics
The Harvard Branch of Continental Travel is located 30kms east of the CBD. While a wide range of customer demographics are represented in the suburb, from low socio-economic through to high income, two key demographic groups characterize the area: young families with toddlers and primary school aged children, and "empty nesters" - older families with adolescent children in their mid teens to early twenties. There have recently been a number of facilities built, catering for the needs of these two groups. For younger families, a new childcare centre, and for the ageing population a new retirement village and nursing home have been established. A multi-level shopping centre, Harvard Park, has also just opened, with over 500 stores now operating.
The predominant ethnic profile of Harvard is Anglo-Australian with a significant percentage of first, second and third generation Greek and Italian-Australians. More recently, the profile has expanded to include an increasing proportion of new immigrants of Chinese and Vietnamese origin.
Harvard Branch is located on the busy main shopping strip in Harvard and is Continental's newest branch in the State, having opened just six weeks ago. As such, it does not have an existing client base. The Branch is open from 9:00am to 5:30 pm each day, and closes at 6pm on Fridays. It is not open on the weekend.
The staff profile within the Harvard Branch appears divergent, but is not atypical. Personnel from the neighboring branches have staffed the Branch and as such, the teams have not worked together previously. There are a high proportion of long-serving employees, with an average 7-year tenure, together with an equally significant percentage of short-term staff. All staff are Anglo-Australian except for one of the Part Time Travel Associates who is of Greek origin. The attrition rate within Continental's Branches is within the average range, although there has been a slight increase in turnover over the last 2 months, particularly with the more junior members of the team. Recent satisfaction surveys indicate a 65% staff satisfaction level and 54% staff advocacy.
4. Market Needs
Domestic and International Packages are a specialized product, and first-hand knowledge of these packages is necessary in order to effectively promote and sell them. Many potential customers are unsure of the location they wish to reach. Part of the value associated with travel agencies is the knowledge they possess about destinations. Customers look to the agency to provide them with sound advice for a competitive price. Continental Travel Group at Harvard is confident in its ability to do so. Continental Travel Group at Harvard can save the customer time and money, and help to ensure that they are satisfied with their vacation.
5. Market Trends
One notable trend in the travel industry is increased deregulation. Deregulation has increased competition and the need for differentiation. In many cases, the prices of airfare and other travel-related services have dropped. Additional trends include caps on agency commissions by many of the larger airlines, increases in adventure travel, and reduction of profit margins.
6. Market Growth
The travel industry is growing. Reasons for this growth include a healthy domestic economy and the increased value of the Aussie has made travel more attractive for Australian residents. The healthy economy has increased business, which in turn will see a boosted domestic business travel for 2007.
7. SWOT Analysis
In the following four sections are the most relevant issues to Continental Travel Group at Harvard's and for its successful operation. Harvard's strengths include its management, experienced staff, marketing experience, and targeted focus. Harvard will capitalize on these and other strengths, to take advantage of opportunities and manage threats. Firm weaknesses are primarily those inherent in a start-up venture.
7.1. STRENGHTS
· International network of more than 1200 stores
· Workforce of over 6500 employees
· Annual T/O of $3.5 Billion
· Expanding at rate of more than 20% a year
· Recognised as the fastest growing business of its kind in the world
· High proportion of long-serving employees average of 7 year tenure
· MANAGEMENT: Harvard's manager has a successful record in this industry. His experience and the network of valuable connections he has developed will contribute greatly to Harvard's success.
· LOCATION: Harvard branch is ideally located.
· EXPERIENCED STAFF: The Harvard team is experienced in the travel business. Most senior members have over five years experience.
7.2 WEAKNESSES
· Lack of differentiation between offerings of major players resulting in price base competition
· Only one staff of Greek origin when significant percentage of ethnic profile are Greek and Italian
· No Chinese or Vietnamese consultants working at branch
· Still to establish a customer/client base
· Branch is closed on the weekends
· Increase in turnover of Junior members within the Team
· Poor staff satisfaction and advocacy levels
· START-UP STATUS: Harvard is a start-up business in the area.
7.3 OPPORTUNITIES
· Australians have traditionally been considered as avid travellers, vacations taken at least once in every 3 years
· Age group of 20-35 travel internationally at least 1-2 years
· Increase in domestic vocations with increased uncertainty in international travel due to wars, terrorist attacks and natural disasters
· New shopping centre with over 500 stores just opened
· Ethnic population with very high percentage of Greek and Italian- Australians
· Increasing population of new immigrants of Chinese and Vietnamese
· Young families and empty nesters
· Older families with adolescent children in their mid teens to early twenties
· Branch is closed on weekends
· The team has not worked together previously
· Package Tours and Cruises
· Selling insurance products
· Incentives from airlines and major hotels
7.4 THREATS
· Decline in international travel due to wars, terrorist attacks and natural disasters in popular tourist/holiday destinations
· The collapse of local airlines reducing the capacity to service the domestic destinations
· Increase in fuel prices
· Web-based travel sites offering cut price travel deals
· Jetstar and Virgin Blue offering flights and packages at highly competitive rates
· New shopping centre with 500 stores just opened including major competitors such as Jetset and Harvey World including smaller independents
· The aging population in the area
· INTERNET AND PRICE COMPETITION: When the airlines were deregulated, price competition increased. Further, the Internet has provided a sales medium for consolidators who compete on price and has also given consumers the ability to plan and arrange trips for themselves. Thus, the traditional agency faces greater competition.
· ECONOMIC DOWNTURN: The strong domestic economy has been good for the travel and tourism industry. Continued growth is anticipated. However, unforeseen or unanticipated economic recession would reduce disposable income and threaten Harvard's sales.