Submission Coversheet (All Programmes)

Student ID Number
(Do not include student name as
anonymous marking is
implemented)

Programme Title

Module Title

Module Code (listed on Moodle

and in LTAFP)

Module Convenor

Coursework Title

Academic Declaration:
Students are reminded that the electronic copy of their essay may be checked, at any point during their
degree, with Turnitin or other plagiarism detection software for plagiarised material.

Word Count 2816 Date Submitted

This essay presents the opportunity of an independent luxury travel agency and tour operator.
Fly Travel Agency will offer excellent services and the opportunity of receiving a personal
travel manager for all the bookings of every customer. In this way, a strong relationship with
every client will be realised next to the possibility of receiving all made luxury holidays.

My opportunity is to create a business that takes into account the needs of customers of
receiving exceptional services and unique experiences. For this reason, choosing the best hotels
in the world would be realised in relation to the knowledge of the travel requirements of every
client. This represent an essential aspect in a highly competitive market that the needs of the
assurance of offering the best prices and great services.

According to ABTA, over 86% of Britons took a holiday at home or abroad in the last 12
months, this representing a significant increase compared to 2015 and 2014 . Furthermore,
based on the results, it can be argued that the last period represented the largest proportion of
people taking a holiday since 2011 (ABTA, 2017). Clearly, this will impact positively the
opportunity of opening and travel agency in London.

I argue that offering excellent services for my customers will represent the great manner of
creating powerful connections with every client, but also to offer exceptional services . The
target market of the company will be comprised of people aiming to spend a quality time in
luxurious venues from all over the world (Weerawardena, 2003). Considering the fact that over
53% of people booking a holiday in the last 12 months consider a city break and 38% of beach
holiday, the business would focus greatly on offering clients the holiday packages desired .

I propose to focus greatly on the creation of services based on client requirement. However, in
order to achieve strong results, a high number of elementary considered, including the target
market, the requirements of every client, the level of competition exist in the market.
Furthermore, through developing powerful services, the organisation has the advantage of
maintaining a large number of customers (TravelWeekly, 2017). Fly Travel Agency will focus
on high income customers, health-conscious individuals that are interested in spending their
time into a relaxed manner. These are lawyers, executives, doctors, bankers. Although, it will
be extremely difficult to compete with the experience providers at the beginning, our target
market is an exploitable niche and we offer differentiated services (Utterback, 2014).
My theories are Prospect Theory and Opportunity Theory of Entrepreneurship. I will apply
prospect theory in order to explain how competition and the economic environment affect risk
perception at time of entry and the growth ambitions (Baumol, 2014). Therefore, as Jones
(2014) suggest, they are three fundamental propositions of prospect theory which provide a
powerful framework that can be applied in order to improve the understanding of the manner
and to can yours make decisions under uncertainty (Baumol, 2014). The first fundamental
proposition is that individuals of view outcomes from decisions under uncertainty as gains or
losses in relation to a reference point, that corresponds to the status quo. The second
fundamental is that losses loom larger that gains and the third value of outcomes is assessed by
decision weights.

Entrepreneurships

As Baumol (2014) suggests, entrepreneurs are the individuals able to experience the
uncertainty and ambiguity of developing a new idea for the purpose of improving the lives of
people. Furthermore, they are agents of change, the fact that they should use and high
judgement decisions in relation to the resources that should be used and their allocation. As
Utterback (2014) suggest, entrepreneurs are people who have a deep understanding of a
specific area and use the human resources and knowledge for creating a powerful value
proposition.

The risk for the new venture can be assessed by taking into consideration the cognitive
behaviour of the entrepreneur. Consenquencely, the decisions will b in accordance to the
personal beliefs, considerations and strategies and visions.

The field of entrepreneurship should receive a special attention, considering the fact that they
represent highly important economic agents that can bring a large number of benefits by
improving the life of individuals (Jones, 2014). However, the financial implications for
entrepreneurs must be closely taken into account, as they represent one of the greatest challenge
that should be considered.

One important theory of entrepreneurship is represented by planned behaviour, that consider

the importance of creativity in the context of developing improved ideas (Jones, 2014). Clearly,
considering innovation and connectivity is extremely important in the context of creating the
new avenger on a highly competitive business environment. As Baumol (2014) argues,
entrepreneurs start the businesses from their personal desire of developing their own ideas to
an extent that will offer respect and consideration. Taking into account this theory is essential,
as it will offer a large number of information in relation to the behaviour of every entrepreneur.
Therefore, through some close analyses of the behaviour and intentions, the next strategies
implemented can be easily understood (Utterback, 2014).

For entrepreneurs, developing new and improved ideas is one of the most important aspect
that will offer support throughout the entire process of discovering and implementing strong
strategies (Weerawardena, 2003). Therefore, using connectivity is highly useful, as better ideas
can be transformed into reality. However, on a highly competitive environment, the
entrepreneur should have the ability of making everyone understand the power of the ideas and
the efficiency of using different methods of implementing it (Baumol, 2014).

In creating a new venture, the decision-making process has a powerful impact on the outcome
of the business. For this reason, considering the risk in every stage of developing the idea is
essential. Cognitive theory represents a powerful approach that has the purpose of examining
the connection created in between perceptions and the risk taken by every entrepreneur
(Utterback, 2014).

Rationale for the Proposed Venture

The idea about opening a travel agency came from the personal research in tourism industry.
Therefore, more than 1 billion people travel all over the world on a yearly basis for different
reasons, including leisure, business, education or family (Utterback, 2014). Therefore, the
travel industry offers tremendous business opportunities that will a large number of chances
for the agency to develop at the global level.

Fly Travel Agency will be a first-class company aim to become one of the leading premium
travel agency in UK that will offer service excellence that will continue to innovate and develop
partnerships with the best hotels in the world. It targets business travels and leisure travels with
a high income that enjoy spending their holidays in East Asia, South West Pacific, the
Americans or Africa.

However, developing a new venture implies a large number of risks that should be assessed by
the entrepreneur. In this context, prospect theory can be introduced (Weerawardena, 2003).

Considering the fact that Prospect Theory represent an economic theory, it has a purpose of
explaining the choices of people under different risk situations (Utterback, 2014). In the case
of Fly Travel Agency, a large number of risks can be easily associated. However, the
opportunities created represent one of the greatest chance for the agency to perceive games
better than losses.

Furthermore, the luxury market creates extra risk, as every client has extremely high
expectations from the company. In order to meet their needs, every aspect related to customer
service should be closely analysed. Next, people are generally resistant to changes, therefore it
will not be easy to create a strong position on the market that is controlled by companies with
a large reputation (Jones, 2014). Still, the company has the possibility of using the opportunity
by developing a team of extremely passionate destination experts in some of the most popular
areas in the world. As a result, we will be able to provide premium, tailor made holidays to
different long-haul destinations.

Next, one extra service that will have the potential of increasing customer loyalty is represented
by Fly Travel Agency Points that can be collected for each GDP spent on people’s holidays.
They only need to book a package for three or more nights in order to receive the points that
can be used for their next holidays.

Therefore, taking into account the Prospect Theory, it can be argued that the new venture
represents a strong player on the market that is worth investing in (Weerawardena, 2003).
However, using a large number of resources into an efficient manner is one of the most
important aspect that will ensure the success and recognition of the company on the market.

The SWOT analyses of the travel agency represent the great opportunity of understanding the
strengths and weaknesses, next to the opportunities and threats existed for the company (Jones,
2014). By far, one of the larger strengths of our company is related the fact that we will offer
every customer a personal travel consultant that will share their wealth of knowledge and
experience for and reaching the entire experience. However, the fact that the company is new
the market represents the great weakness that should be addressed. The fact that a large number
of individuals travelled on a yearly basis represent one of the largest opportunities for the
company (TravelWeekly, 2017). However, when considering the possibilities of developing
the business, the challenges presented from the trouble interested prospective must be
considered. For example, the threat of terrorist around the world has become widespread with
many countries, including the United Kingdom. Furthermore, the turbulent time in UK politics,
the results of EU referendum or the impact on developing the pound should be considered when
developing the business (Utterback, 2014).
Despite all significant event, the findings presented by British holidaymakers highlight the fact
that customers continue to offer value for their holidays (ABTA, 2017). For this reason, an
increase in the number of people booking holidays can be easily highlighted.

Competitor analyses

Fly Away will operate in a highly competitive industry and our success depends upon our
ability to compete against a large number of big players existed in the market. For this reason,
the price for the services, the availability of travel inventory, customer service or reliability
represent elements with a powerful impact on the potential of the company to grow constantly
(ABTA, 2017). We will compete with online companies such as Expedia Inc or
Lastminute.com or with the large Internet companies and services with a powerful expertise in
facilitating Internet traffic, including Google or Yahoo that have signed partnerships with
strong players in the market (TravelWeekly, 2017). However, for the niche market that we
focus, the major competitors are Black Tomato, that was awarded Best Luxury Holiday
Company in 2016; Kuoni, awarded as “Best Luxury Holiday Company (Large)”; Emirates
Holidays (TravelWeekly, 2017).

Marketing plan

A strong marketing plan will offer the possibility to develop a large number of opportunities
for the business. For this reason, it is essential to take into account will element that will impact
the decision of buyers to purchase the products and services offered by the travel agency. Still,
in a challenging busy environment, the weaknesses presented by the market should be closely
analysed (Baumol, 2014). For example, the prices for the services offered should be in relation
to the offerings exist in the market and the benefits brought for customers.

My Budget &
Breakdown of Expenses
Expenses

Total
Budget Total

£152,000. Investmen 55,00

44%
00 t 0
 27,00
Total Assets 14%
0
Expenses
£165,000
£165,000. Assets to 20,00
11%
00 sales 0

Expenditu 35,00
Difference 21%
res 0

(£13,000. 15,00
Other 10%
00) 0

Total Expenses

Other

Expandures

Assets to sales

Assets

Investment

0 10,000 20,000 30,000 40,000 50,000 60,000

For Fly Travel Agency, it will be extremely important to make use of different forms of
commendation for the marketing plan develop. Firstly, the support will be easily highlighted
on their website. This is because, every customer have the possibility of using the online
information for booking their holidays or for gathering knowledge in relation to the company.
However, it will be extremely important to maintain the website and to improve it constantly.
Furthermore, the company will invest greatly in offering extreme security while purchasing the
product on the website.

Another form of communicating is represented by magazine advertising. This will be greatly

used in order to increase the visibility of Fly Travel Agency on the market. In the context of
developing a powerful business, promotion represent one essential element that will increase
the possibilities for developing a strong business on the market. As Baumol (2014) suggests,
communication customers can be easily achieved by considering the power of promotional
mix. This is because, every marketing activity developed, including Facebook ads, Instagram
advertisement, Google Adds will have the purpose of building a brand value that will drive
traffic and bookings. Therefore, the more travel transactions across website of the company,
the better its profitability (Utterback, 2014).

As operations with progress, Fly Travel Agency will expand is that a base and the market would
it operates (ABTA, 2017). Therefore, after the primary target market has been defined and
served, new possibilities of serving additional segment should be added. Considering the fact
that competitive strengths will be constantly taking into consideration, Fly Travel Agency will
easily facilitate the access information every individual.

Advertising represent one of the most beneficial and fast-growing revenue that can contribute
to the company (Utterback, 2014). For this reason, Fly Travel Agency should invest greatly in
making the company well known on the market.

It can be noted that the marketing strategy will be developed on a long-term relationship with
every customer. In this sense, Fly Travel Agency will maintain a database of clients, in order
to obtain important demographic and geographic information (Utterback, 2014). The fact that
there is no limit in terms of the number of customers that the agency can serve, it is clear that
becoming an international provider of luxury holidays can be achieved through hard work and
determination.

Operational model

The operation model that could be used by the travel agency will be Agency Model, which is
a commission based model whereas hotels list their services (Utterback, 2014). As a result, Fly
Travel Agency will not have to buy anything upfront. Clearly, this is highly beneficial for every
hotel, as it will give them the freedom to price they are services and packages in accordance
today criteria (Utterback, 2014).

However, when the company will be established in the market, it can start using a merchant
business model. Based on this, hotels with will sell their packages at a discounted price and to
the Fly Travel Agency will sell them to customers at the market price. This will benefit greatly
both parties, being one of the most used model (Weerawardena, 2003).

Offering the chance of using two business models will develop a preference program for the
business, which will allow guests to decide how they would like to book each package, whether
this is prepay or to pay to the hotel. It can be argued that the matching model is more profitable
for Fly Travel Agency, as it will offer the possibility to the company to gain larger commissions
(Jones, 2014).

Management

The management of the travel agency is important in delivering the knowledge and skills
necessary for every employee (Baumol, 2014). For this reason, an IATA course will be
extremely beneficial, offering the possibility of improving the skills to supervise and manage
a team, to initiate changes and make business decisions based on strong negotiation skills. As
a result, the management will have the possibility of gaining competitive business strategy and
developing new products and marketing services efficiently (Weerawardena, 2003). Next, the
managers should gain an insight of the accounting procedures developed by the company in
order to develop a powerful business plan that will ensure a strong financial head of the travel
agency.

However, when forming the team of the company, the experience in the field, the skills for
developing, coaching and motivating employees will be extremely important for the long-term
success and consideration of the company (Baumol, 2014).

Risks in the travel agency

The owner of the company should take into consideration the risk exposed by the market in
relation to opening the new organisation in a very competitive business world (Utterback,
2014). For example, giving the discretionary nature of leisure travel, and the high-risk aversion
of mass tourist market, it is clear that the company should take into account the possibilities of
eliminating any issues existed in the company. In this sense, employing high motivated
employees and signing partnerships with hotels that have a strong reputation in the market will
facilitate the growth and development of Fly Travel Agency.
References
ABTA, 2017. holidays Report. [Online]
Available at: https://abta.com/assets/uploads/general/2016_Holiday_Habits_Report.pdf
[Accessed 25 8 2017].

Baumol, J., 2014. Entrepreneurial enterprises, large established firms and other components
of the free-market growth machine. Small business economics. 4th ed. London: University
Press.

Jones, P., 2014. Operational issues and trends in the hospitality industry. International Journal
of Hospitality Management, 18(4), pp. 427-435.

TravelWeekly, 2017. Abta survey finds 86% of Brits booking holidays. [Online]
Available at: http://www.travelweekly.co.uk/articles/63447/travel-convention-2016-abta-
survey-finds-86-of-brits-booking-holidays
[Accessed 24 8 2017].

Utterback, J., 2014. Mastering the dynamics of innovation: how companies can seize
opportunities in the face of technological change. 3rd ed. London: Routledge.

Weerawardena, J., 2003. The role of marketing capability in innovation-based competitive

strategy. Journal of strategic marketing, 11(1), pp. 15-35.