Your Road Map to a Great Tourism Business Plan
Any great tourism business begins with a great “road map.” This road map serves as your business plan with actionable steps for moving forward with developing the enterprise. There are seven key components to your road map.
1. Clear Concept- Before you can dive into the road map, the essential first step is to clearly articulate your enterprise concept. What is your enterprise? What do you do? What are you trying to achieve? What impact do you expect your enterprise to generate? Before you move further down the road map, be sure that you put some thought into these questions and can clearly define the concept of your tourism enterprise. Try to condense this concept into a simple one to two sentence pitch that clearly articulates your business concept.
2. Market Analysis- Your market analysis includes the international, regional, and national tourism statistics and travel trends, the profiles of your target market segments, and a value chain/ industry analysis. Begin by getting an idea of the relevant tourism trends and statistics. What percentage of tourists coming to your destination region, country, or city are country nationals versus international visitors. When is the peak season that tourists come to visit? What are the typical demographics of visitors? Has the number of international tourists to your destination been increasing or decreasing? Addressing these questions will help you to better understand your market before moving forward.
From here, you can develop the profiles of your target market segments. Determine the nationality of your market, their wants and needs, their budget, etc. Think about whether your target traveler is seeking adventure and physical challenges, luxury and relaxation, or service and learning opportunities. Additionally, you will need to analyze the existing tourism industry in your destination. Especially if your enterprise will work with intermediaries; investigate the existence, success, and business models of tour operators, travel agents, and hotels; as they relative to your business concept to market or sell tourism products.
3. Sales and Marketing Strategy- At this stage of your road map, it is important to determine strategic positioning in terms of the pricing, placement, and promotion strategies of your business. There are numerous factors, both short and long-term to consider for pricing including the value provided compared to that of competitors, the price the market is willing to pay, the revenue needed to enable the business to reach its financial goals, and profit maximization. Your placement, or distribution, may be conducted either through direct or indirect sales. Your promotion strategy will describe the sales and marketing techniques used to reach your target market and should include online and social media marketing.
4. Competitive Analysis- Complete a summary of competing businesses and products, and determine your competitive advantage. Begin by defining your business competition- the people and businesses that offer similar products and services and seek the same markets. Research these competitors and assess their products or services on a number of factors, such as pricing, product quality, and customer service. Porter’s Five Forces Analysis is a useful tool to use for a through investigation of your competition. By assessing your business competition against your proposed enterprise, you will gain a better understanding of where your business stands and how best to leverage your strengths against your competition’s weaknesses. To determine your competitive advantage, simply outline the major advantages that your enterprise holds over the competition.
5. Operations and Training Plan- Consider your business structure and the key personnel and training needs that will be required to support it, while also keeping in mind any legal considerations. Will your enterprise be a private company, a partnership, a limited liability corporation (LLC), a cooperative, a non-profit organization, or an association? There are pluses and minuses to each, and it is extremely important to think carefully to determine the best structure for your enterprise. Once the structure is determined, consider the number of employees needed and the roles and responsibilities of each. Consider the hierarchy of employees in your business and how profits will be shared. Finally, the legal environment is key to consider; think about potential requirements like business registration, employee/membership agreements, permits, and insurance coverage.
6. Community and Conservation Support- Consider sustainable tourism as a cornerstone to your business plan. Sustainable tourism has the potential to not only mitigate potentially harmful impacts of visitation to a site, but it can also support conservation of the resources upon which it depends. At Solimar, we employ a market-based approach that links jobs and revenue generated by sustainable tourism to support conservation of the resources upon which the tourism depends. To develop a sustainability plan, begin by assessing the conservation threats related to your tourism enterprise. Once these threats have been assessed, you can choose tourism conservation strategies that address those threats, such as an environmental education program or a trail monitoring and research program. Lastly, be sure to budget for the implementation of your sustainability plan, including salaries, equipment, materials, and trainings.
7. Key Milestones and Workplan- Lastly, now that your business plan has been fully considered, you can create a timeline of the major activities related to the establishment of your enterprise and its tour products and services. Create a comprehensive list of the milestones to be completed for the successful establishment of your business and determine the order in which they shall be addressed. With each milestone completed, you are one step closer to being the proud founder of a great tourism business!
