Travel _amp; Tourism Industry

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					Travel & Tourism Industry
        Business Drivers
Travel & Tourism Industry

               Key Business Drivers

   Optimise Capacity                  Reduce
   Utilisation                        Costs
                       Grow Market
Business Strategies

               Optimise Capacity
Extend Guest
                                                      of excess
     Customer Loyalty
     Program                                    Custom Tailored
                                                Travel Packages
                        Business Partnerships
Optimise Capacity Utilisation
Extend Guest Services

Create New Guest Services
   Offer a range of new leading edge products and services that
    are innovative and create additional revenue streams -
    inflight/inroom facilities
   Differentiate products/services for the Business Traveler,
    Leisure Traveler ,Tourist or customised Personalisation
Increase revenue streams by offering new innovative guest services
   Leisure services, Interactive entertainment, mobility services,
    video on demand & Internet access
Optimise Capacity Utilisation
Customer Loyalty Programs

Customer Loyalty Programs
   Frequent Flyer
   Hotel Frequent Guest
   Visa/Fly Buys Point Cards
   Frequent Rental Car Hire
   Duty Free
Increase Sales to existing customer base
Encourage more frequent & longer Travel/Guest stays
Optimise Capacity Utilisation
Business Partnerships

Business Partnerships
   Partner with companies which Offer complementary travel industry
     solutions, eg. Insurance companies, etc.

Grow your market share by developing strong business partnerships
  Access to larger markets/larger customer base - Domestic/Global
Optimise Capacity Utilisation
Customer Tailored Travel Packages

Custom Tailored Packaging
   Niche markets - skiing, diving, last minute
   Segment of the market (business, leisure, Tourist)
   Value Add
Increase sales
   Entice customers to invest in personalised offerings and packaged
Optimise Capacity Utilisation
Rental/Leasing/Sale of Excess Resources

Rent/Leasing of Excess Property/room Space
   Online Auction of flights/rooms - Last minute specials
   Rent/Lease excess property/office space/carrier space

Increase revenues though alternate channels
   Achieve maximum occupancy/capacity levels through other
Business Strategies

                            Grow Market

 Brand Extension/
 Positioning & Target                                     Establish a
 Markets                                                  Presence with
                                                          Tourism bodies

           Acquisitions &
           Strategic              Establish New
           Alliances              distribution channels
Grow Market Share
Brand Extension/Positioning &Target Markets

Extend Brand Extension/Positioning & Targeting Markets
   Entering into new markets
   Focusing on Niche Markets
   Bundling/Packing offers for a targeted Traveler or segment
Increase Revenues through Brand Extension/Positioning & targeting Markets
   Airlines are entering into Mobility & Wireless Comm.
   Personalisation for Loyal Customers
   Packaging all areas of tourism (car rental, hotel, travel)
Grow Market Share
Acquisitions & Strategic Alliances

Acquisitions & Strategic Alliances
   Acquire affiliate/competing Partners
   Form Strategic Alliances to leverage services/offerings
   Complementing services for packaging to increase $ point
Grow Market share by acquiring other companies
Grow Market share by forming Strategic Alliances
Grow Market Share
Establish New Distribution Channels

Establish New Distribution Channels
   Agents, Wholesalers, Call Centre
   Member of Portal

Grow market share by expanding your exposure & revenue through new
distributions channels
Grow Market Share
Membership of Tourism Bodies

Establish a Presence with Tourism Bodies
   Online Presence
   Marketing/Campaign Presence
   Industry endorcment/credibility

Grow market share by expanding your presence/access through alternate
   Tourism Bodies
Business Strategies


Join Buying Group,
Promotional &
Marketing scheme                                           Leading edge
                                                           processes &
         Effective Staff                                   technology
                                             Internet Access &
                     Consolidation of        Reservations/bookings
                     Back office Processes
                     and Outsourcing
Reduce Costs
Join Buying group, Promotional & Marketing Scheme

Join Buying group, promotional & Marketing Scheme
   Consortium for marketing & promotion.
   Aggregation of purchasing spend

Reduce purchasing costs, promotional & Marketing costs by belonging to
larger buying group
Reduce Costs
Effective Staff Training/Flexible Staff

Effective Staff Training/Flexible Staff - rostering system

Reduce costs by retaining trained staff
  Web based training
  Technology based training
  Match staff to service requirements
Reduce Costs
Consolidate Back of House Processes

Consolidation of Back of House Processes
   integrating of processes
   Outsourcing of non core processes

Reduce costs by consolidating or outsourcing Finance, reservations , IT Help
Desk, telecommunications infrastructure and Education.
Reduce Costs
Internet Access & Reservations/bookings

Internet Access & Reservations/Booking
   Online Presence - Reservations/Bookings & Information
   Access global & domestic markets

Increase Revenues by providing internet Access & Reservation booking
   Build a user friendly, easy to navigate web site which offers tourist
     information & online bookings & payments
Reduce Costs
Leading Edge Technology & streamlined internal
Leading Edge Internal Processes & Technology
   PMS - Property Management Systems
   CRS - Customer Reservation Systems
   GDS - Global Distribution Systems
   CRM -Customer Relationship Management

Reduce costs and improve service levels by implementing leading edge
technology and automating internal processes
Travel & Tourism Industry

          Industry Overview
Market Overview
  Industry Definitions
  Industry Issues
  Telco Positioning, Competitors & Partners
  Glossary of Terms
Value Chain
Business Drivers & Strategies
Map to Telco Capabilities
Value Demonstration
Case Studies
Telco Industry Strategy
Market Description
Hospitality, Travel & Tourism Sector defined as
     The vast, complex network of businesses engaged in the lodging, transportation,
      feeding, and entertainment of the traveler
         from WTTC
     The industry sells intangibles
         ‘Total Travel Experience’ through packaging products & services.
Key Market Segments:
     Hospitality - Hotels, accommodations, clubs, cafes & restaurants
     Travel - Air & land people transport, Travel agents & Airports
     Tourism - Domestic & International Tour operators and state & federal
      Government Tourism Department
Market Overview
Market size
    A$ 60 Billion annual turnover
    Growing at 10%- 15% per annum (2001/02 projected .4% decline)
    4.5% of GDP
    13% of total export earnings
    64% of total service export earnings
Employs almost 1 million Australians
    690,000 directly & 290,000 indirectly
    7.5 % of total employment in Australia
Domestic and International Travel Figures
    Approximately 4.7 million international visitors per year
        International 22%
        Domestic Tourism 67%
        Domestic Business 11%
Market Overview
Diverse growth across the sector
     Air Transport International & Domestic, Hotel Accommodations, profitability will
      decline by 4.2% 2001 - 2002
Decline due to the following factors:
     Impact of GST
     Increased Fuel Prices
     Slow down in the economy
     Oversupply of accommodations
         - Hotels/serviced apartments.
     Exchange Rate movements leading to a decrease in overseas travel.
     Impact of recent Terrorist attacks
Market Overview
Growth reflecting sales volume increases but prices falling
     Lower value of the Australian dollar to Euro and US
         leading to an increase of inbound travelers and increasing travel within
     Increase in inbound and Domestic Travel
         “See Australia”
     Competition
         cheaper domestic airfares due to new entrants (Virgin Blue)
     Focus on Niche Markets & Personalisation
     Increase in major international events held in Australia
         conference, sporting events, etc.
Market Overview
Key Success Factors
    Loyal Customer Base
        loyalty programs
    Establish a clear market position & differentiation amongst competitors
    Efficient channel management & leveraging brand
    Business Expertise of Operator
        having a skilled & flexible team - enhanced experience
    Products & packaging links with other related Transport,Travel & Tourism products
    Optimum capability & asset utilisation
    Effective business model
        being part of a buying or franchise group, joint promotional & marketing
Market Overview
Key Success Factors, cont.
    Well developed internal processes
        reservation & booking systems, property management systems, on-line
         training, integrated systems
    Pricing
        less complex, packaged and tailored for the market sector
    New Distribution Channels
        outbound marketing & Internet
Market Trends

 Expansion of Customer Loyalty Programs -
    Enhanced Packages/offers
    Online access to flight departures/arrivals & information
    Services and products
    Personalisation
        convenience & choice
Expansion of Guest/Travel Services
    Additional services/products through currency exchange dealers/travel agents
    Enhanced range of services
    Leading edge technology for guest services to provide point of differentiation
 Market Trends

Online reservation/booking systems
    For both the Airlines and hotels, booking reservations and access to
     information systems on the Internet is of growing importance, eg
        E-ticketing
           • Caters to hotels and the Airlines
        Portals & Interactive Web sites
           • Membership of a broader tourism association site
           • E-Procurement - indirect purchases
        M-commerce
           • Purchase of tickets & bookings through hand held devices
Market Trends
Streamlining of Business Processes
    Integration of back Office processes in the industry with centralised data
     processing and storage
        payroll, reservations, IT help desk & finance

Outsourcing IT & Telecommunications Services
    Requirement to provide hotels with Managed IT & telecommunications services
        to reduce capital expenditure and provide for variable cost base.
    Key Financials
    Industry Income statement & Balance Sheet

                                   AIRLINES                       HOTELS
   % x Revenue
   Labour                Expenses      22.3                       25                 41.6
   Fuel                           13.3                            --                  5.0
   Maintenance + Repair           15.9                   --                    6.0
   Passenger Services         9.3                                 --                  --
   Sales & Marketing         12               --                         --
   Operating Leases           3.8             --                         8.4
   Sub Contractors            --              --                         9.2
   Depreciation & Amortisation         7.8                        7.9                 6.3
   Other Expenses            6.0              47.9                      16.8
   Total Expenses         90.4                80.8                      93.3
   Earnings Before Interest & Tax EBIT             9.6                  19.2
   INTEREST                 1.5                    5.2                    .5
   TAX                              3.0                       5                2.5
   NPAT                             5.1                   9                    3.7
Key Financials
Industry Income statement & Balance Sheet - Hotels

                                    Bass                  ACCOR          Hilton
   % x Revenue
   Labour                Expenses          21             --             --             25
   Consumables               18            --             --               18
   Other Expenses            34.2          80.7           64.8             29.9
   Depreciation & Amortisation               5.2            7.5          11.1
   Total Expenses          78.4            88.2           75.9           80.8
   Earnings Before Interest & Tax EBIT             21.6           11.8           24.1
   INTEREST                 3.8              1.7          10.2             5.2
   TAX                               5.3            3.7            6.0            5
   NPAT                             12.5            6.4            7.9            9
Key Financials
Industry Income statement & Balance Sheet - Transport

                          Federal Express                   Toll                 TPG(TNT)
   % x Revenue
   Labour                Expenses      41.6                 --                   28.1
   Sub Contractors            9.2      --                   --
   Rentals & Leasing Fees          8.4           --                   --
   Depreciation & Amortisation           6.3                 1.5                 11.1
   Repairs & Maintenance           6.0           --                   --
   Fuel                            5.0           --                   --
   Other                          16.8           --                   --
   Total Expenses          93.3           96.2              90.7                 93.4
   Earnings Before Interest & Tax EBIT            6.7                 3.8               9.3
   INTEREST                  .5             .3                   .7                .5
   TAX                              2.5               .5                   2.6          1.9
   NPAT                            3.7                3.0                  5.4          4.2
Industry Issues
Grow & Retain Market Share
    Acquisitions & consolidation in both the hotel & Travel industry
    Clarity of Brand & targeted Market positioning
Reduce Costs
    Integrating back office Processes
    Online bookings & payments
    Optimum capacity utilisation
        matching aircraft with routes, hotel rooms, yields, etc.
    Effective control systems to manage yields better and increase earnings
    Automation of internal processes
        reservation systems that integrate with other service providers, ground
         handling, flights & maintenance
Industry Issues
Low value A$ dollar
    Increases inbound travel/tourism
    Decreases outbound travel/tourism
    Fuel Costs
    Capital Costs - Aircraft, etc.
Impact of GST
    On discretionary spending
    Online Training
    Flexible staff
    Staff retention - incentives
Guest/Travel Services
    Offering leading edge technology in guest rooms
         wireless lan, internet access, video on demand, interactive entertainment
Industry Issues
    Need for globally competitive offerings
Weakening Economy
    Global impact of the inbound/outbound Business travel
    Exchange Rates
    Mergers and Acquisitions
    New carriers entering the market offering cheaper airfares
    Accommodations
         serviced apartments/Hotels
         oversupply and lower demand for accommodations relevant to 2000
Industry Issues
Seasonallity Demand
    Management of seasonal inbound/outbound travel
    Management of demand for the increase in large international events held in
Impact of Technology
    Video conferencing
         potentially contributing to a decline in Business Travel
    Offering leading edge technology in guest rooms/on flights
         to create new revenue streams
    Real time access to product & service availability
         both domestically and internationally
    Security
    Terrorism
Telco Positioning
The Hospitality, Travel & Tourism (H,T&T) segment generates approximately $271m in
revenue to the Incumbents
    Majors and SME
    Major customers make up approximately 70% of this revenue.
    Major customers, Qantas and SITA make up approximately 58% of this revenue.

Review Industry market share:
    Estimated total market(Inc SITA)           $199 Million
    Telco Approx % market Share         38%
Telco Competition
Domestic Telecommunication Providers
     Optus/Singtel, TCNZ/AAPT, Vodafone, Orange
Global Telecommunication Providers
     MCI Worldcom, Global One, BT, AT&T, Equant, NTT
Minor Carriers and Service Providers
     Primus, RSL, WorldCom, Powertel, Global One, WorldxChange and
      AAPT(focused on CBD)
New Entrants into the Market
     Energy companies, Railways & Airlines (Virgin Mobile)
Niche Players
     Skynet Global (wireless Lan), Intertouch (high speed access
Internet Providers & Internet Telephony
Target Partners
Layer 9 - Wap Solutions
MobileSoft - Equity funded by Telco
Potential Direct Involvement in the
Virgin/Telco Business Frequent Flyer
 An alliance that could mean that Virgin offered
  frequent flyers with co-branded Telco services
  including Internet access with Qantas Frequent
  Flyer points being awarded for the usage of
  these services.
 business travel site
 Telco could establish a travel site under in conjunction with Virgin.
Industry Associations & Players
Key Industry Associations & players
Association (Who they are)      What do they do?                          Key contacts          Comindico involvement
National Tourism Alliance –     Peak industry lobby body. Total of 30,000 TBA – MD
previously Tourism Council of   associated members                        Chris Brown TTF –
Australia (TCA)                                                           Policy
Inbound Tourism                 Peak body for Inbound Tour Operators. Peter Shelley- MD
Organisation of Australia       Total of 1000 members                     Anna      Taylor    -
(ITOA)                                                                    Marketing
Tourism Task Force              Major lobby body for the industry. 125 Chris Brown - CEO
                                key players in the industry.
Australian Hotel Association    Lobby body for Hotels.                    Richard Mulcahy- MD
Hotel & Motel                   Alternative lobby group for Hotels.       Denis Winchester -
Accommodation Association                                                 MD
Australian Federation of        Lobby group for travel agents             Mike Hatton
Travel Agents
Meetings Industry               Relationship to be enhanced                  Jenny Lambert
Association of Australia
E Horner & Associations         Key Consultant to the Hospitality industry   Ted Horner
Tourism Training Australia      Relationship to be enhanced
Federal Minister Sport &        Federal office of Sport & Tourism            Hon. Jackie Kelly
See Australia                   Domestic Tourism Initiative - $8m by Fed Graham Perry- MD
                                Govt, $8m state tourism & $6 privately
Australian Tourist              Federally funded organisation whose John Morse- MD
Commission                      charter is to sell Australia internationally
Main Industry Research Bodies
       Main Industry Research Bodies

Organisation                               Web site

Tourism Forecasting Council      

CRC for Sustainable Tourism

Bureau of Tourism Research       


Tourism Task Force – will do research on   Contact: Karl Flowers
our behalf
                                           Telephone: (02) 9368 – 1500


Comindico Market Knowledge Management      intranet website on its way
Industry Applications
    Wireless Lan, WAP, GPRS, Prepaid Mobility Packages
Efficient Customer & Supplier Management
    ASP models (Front & Back of House)eg. Micros Fidelio
Call Centre Solutions
    IVR, CTI, Voice and Internet
Ecommerce & Ebusiness Solutions
    Internet information access, Internet bookings & payments
         Bill Pay
    Broadband, ISP Access, Data Storage, Web Hosting, EFTPOS Network, Electronic
Industry Applications
Managed Solutions/Services
   managed PABX/Voice, total Infrastructure outsource
    Competitive Edge/Loyalty
   Smartcards, access cards for travel & hotels, Guest Services
       in room internet and entertainment
Integrated Branch Networks
   IP VPN QOS, Soft Contact Centre Solutions
Video Conferencing/Teleconferencing
Glossary of Terms
CRS - Customer reservation system
PMS - Property management system
TTF - Tourism Task Force
FOH - Front of House
BOH - Back of House
GDS - Global Distribution System
TA - Travel Agent
STP - Satellite Ticket Printers
CRM - Customer Relationship Management
HRN - Hotel Reservation Network
Rev PAR - Revenue Per Available Room
Business Strategies

Optimise Capacity Utilisation
  Extend Guest Services
  Customer Loyalty Program
  Business Partnerships
  Custom Tailored Travel Packages
  Rent/Leasing/Sale of excess Resources
Optimise Capacity Utilisation
Map Telco Capabilities
                                  Pre-Paid Cards      Smartcards

  Video/Music                                           Interactive TV
  On Demand

                                 Extend Guest                 Data
                                   Services                   Storage

                                      Call Centre

Broadband                                                Payment Options


                                                    Video Conferencing
                Content/E-mail    Wireless Lan/
Optimise Capacity Utilisation
Map Telco Capabilities
                    ASP         Pre-Paid Cards             Smartcards

                              Loyalty Program                      Data
 Alliances                              Call Centre

        Packaged Mobility
                                                            ISP -
                Call Centre     Web Hosting
 Optimise Capacity Utilisation
 Map Telco Capabilities
                          Web Hosting          Packaged
      Bill Payment

                     Business Partnerships                 Data
Electronic                                                 Storage
Catalogue Hosting

                           Domestic & Global
                           Network Access
 Optimise Capacity Utilisation
 Map Telco Capabilities
                              Pre-Paid Cards
     WAP Applications                             Smartcards

Web Hosting

                                                      IP Network
Online Payment
                    Forecasting                Data Storage
Optimise Capacity Utilisation
Map Telco and Partner Capabilities
                         Virtual Contact Centres
               WAP                                 Web Hosting


                          Excess                        Internet
Bill Payment         Surplus Resources                  Travel

    IP Network         Broadband/
                                               Data Storage
                       Video Conferencing
Business Strategies

Grow Market Share
 Brand Extension/Positioning & Target Markets
 Acquisitions & Strategic Alliances
 Establish New Distribution Channels
 Membership of Tourism Bodies
Grow Market Share
Map Telco Capabilities
                         Pre-Paid Cards        Smartcards

                     Leverage Brand                   Internet

Packaging                                            Bill Pay

                                                Interactive TV
Grow Market Share
Map Telco Capabilities
                         Global POP’s        Smartcards

                          Alliances                   Packaging
                             Call Centre


     Service Bundling                      Managed
                         Web Hosting
ow Market Share
p Telco Capabilities
                                                          Contact Centre Solutions

                 WAP/SMS          Pre-Paid Cards          Smartcards

      Internet Travel                                           Interactive TV

                             Distribution Channels                Data
    Broadband                                                     Storage

                                      Call Centre

                                                              Contact Centres
                                                              ISP Services
                IP VPN’s          Web Hosting       Electronic Cataloguing
 Grow Market Share
 Map Telco Capabilities
                                 Click to Call

                            Member of Tourism               Billpay
Web Hosting
                                      Call Centre


       Catalogue Hosting
                           Network Access -TPIPS,   Centre
                           ADSL, Argent
Business Strategies

Reduce Costs
 Join Buying Group, Promotional & Marketing
 Effective Staff Training/Flexible Staff
 Consolidation of Back of House Processes
 Internet Access & Reservation/bookings
 Leading Edge Internal Processes & Technology
 Reduce Costs
 Map Telco Capabilities
                  WAP                 POS/ADSL
                              IVR                        SMS

     Franchise                                             Internet Travel

                              Aggregated Buying/             BillPay
Video streaming
                                       Call Centre

Web                                                        Smartcards
         Managed Services
                                                         Data Storage

                                    Outbound Marketing
                                    Contact Centre       IP VPN’s
Reduce Costs
Map Telco Capabilities
                         E-Learning             IP VPN

                     Staff Training &               ADSL/Argent
Web Hosting
                             Call Centre


     Voice over IP

                                           Video Conferencing
                         Wideband IP
Reduce Costs
Map Telco Capabilities
                         Co-Location       IP VPN

                         Integrated                 Data
Web Hosting
                         Processes                  Storage

                             Call Centre

      Services                             Managed Services

                         Contact Centre
Reduce Costs
Map Telco Capabilities
                              Content                 ADSL/Argent

  Web Hosting

                         Online Communications            Bill Pay

                                  Call Centre

Wideband                                           Catalogue Hosting


                                                Managed Services/
                IP VPN                          Desk Top Support
                              ASP Firewalls
                              Virus detection
Reduce Costs
Map Telco Capabilities
                               ADSL/POS              Smartcards

    VPN’s                                                 IP VPN’s

                      Leading Edge Technology
Web Hosting            Automating Processes                  Storage

                                   Call Centre

Broadband                                                      Bill Pay

       Wireless Lan
                                                   SMS(flight info)
              Contact Centre   WAP- Reservations
                 (IVR)         & Info
Travel & Tourism Industry
              (Value Chain)
Travel & Transport Value Chain
Map our Capabilities

  Strategy      InfrastructureMarketing              Deliver the   Monitor &
  Formulation   and           Material and Sales     Experience                Benchma
                                                                   Survey Customer
                Resources Collateral       Process                 Feedback    rk


                        Competitive Advantage

           Leading Edge/Develop New Business
Map Telco Capabilities

                      Infrastructure Marketing                               Monitor &
        Strategy                                              Deliver the
                           and       Material and Sales Process                         Benchmark
                                                                          Survey Customer
        Formulation                                           Experience
                        Resources    Collateral                              Feedback

               Internet                  Mobiles              E-mail

                                Contact Centre 13/1800

                               Corporate Voice and Data Networks
Map Telco Capabilities
Competitive Advantage

Strategy      InfrastructureMarketing              Deliver the    Monitor &
 Formulation   and           Material and Sales     Experience                  Benchmar
                                                                   Survey Customer
               Resources Collateral       Process                  Feedback     k

                         Global Connectivity                            Wireless Lan

                           IP VPN Solutions                           Loyalty Program

                                                      Staff                      Pre-paid
                        E-communities                               Kiosks
                                                    Rostering                     Cards
                                                                     Direct         CRM
                   ASPs - Video on Demand, PMS                     Marketing-    Personalisat
                                                                  Call Centres       ion
Map Telco Capabilities
Leading Edge, Develop New Business

    Strategy      InfrastructureMarketing               Deliver the    Monitor &
    Formulation   and           Material and Sales      Experience                 Benchma
                                                                       Survey Customer
                  Resources Collateral       Process                   Feedback    rk

                             WAP Applications                          Marketing-     CRM
                                                                      Call Centres   (ASP?)

       E-Learning , M-Commerce , Interactive web sites, CPFR

                                           GPRS        Video on Demand/Broadband

                       Managed Solutions & Outsourcing
              Value Chain
     Strategy       InfrastructureMarketing                Deliver the   Monitor &
     Formulation    and           Material and Sales       Experience                Benchma
                                                                         Survey Customer
                    Resources Collateral       Process                   Feedback    rk

                       Internet             Mobiles              E-mail
                                                 PC                  EFTPOS

                     IOS       Contact Centre 13/1800
                                         Intranet / Hosting
 Basic                       Corporate Voice and Data Networks

                                Global Connectivity                             Wireless Lan

                                     IP Solutions                              Loyalty Program
                                                             Staff                      Pre-paid
Competitive                   E-communities                Rostering
Advantage                                                                                 CRM
                            ASPs - Video on demand, PMS                  Marketing
                                                                          Direct           CRM
                                 WAP Applications                        Marketing
                Collaborative Planning Forecasting & Replenishment (CPFR)
Leading Edge,
                                             GPRS           Video on Demand/Broadband
New Business
                              Managed Solutions & Outsourcing

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