Luxury Travel Services

Executive Summary A detailed marketing plan for creating awareness about Travel Attache’s luxury travel services in Dubai has been presented in this report. The company will provide an integrated luxury travel package that includes accommodation, travel, entertainment, and tour guide services. The main distinctive feature of the package is that personalized services will be provided to suit each customer’s needs.Advertising We will write a custom report sample on Luxury Travel Services specifically for you for only $16.05 $11/page Learn More The value provided by the package include access to the best tourist destinations, comfortable accommodation in over 200,000 hotels, flexible travel plans, and competitive prices. The targeted customer segments include families, the old, and the youth. The brand will be promoted through advertising, public relations, and loyalty programs. Implementing these strategies will require a budget of $795,000. Value-based pricing will be used to sell the services. In the first year, the main marketing objective will be to increase sales and market share by 10% and 5% respectively. In future, the brand can be stretched by introducing luxury gift products such as wristwatches and souvenirs. This can be achieved through the brand image transfer model where the gift products will be associated with the superior characteristics of the travel services. Introduction This report presents a detailed marketing plan for creating brand awareness for luxury travel services in Dubai. The services will be provided by Travel Attache, which is a leading international luxury travel agency (Travel Attache, 2014). The marketing plan will begin with a situation analysis that will focus on the macro-environmental factors that are likely to affect the demand for luxury travel services in Dubai. The industry, customer needs, and other brands will also be analyzed. This will be followed by a discussion on the mar keting strategy that will be adopted to create brand awareness. The last part of the marketing plan will present the budget and pro-forma income statement for the company. Situation Analysis Macro-environmental Factors Rapid growth in per capita GDP is the main economic factor that will positively affect the demand for luxury travel services in Dubai. The GDP of the UAE is expected to grow by 4.4% in 2014 and at an average rate of 4% in the next three years (IMF, 2014).Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The number of millionaires in Dubai and other parts of the UAE is expected to increase by 12% in the next three years. These economic trends will boost the demand for luxury travel services. Changing demographics will affect the type of services that customers will demand due to varying tastes and preferences. For instance, the old are increasingly showing interest in large ro oms, whereas the youth are interested in short holidays and memorable travel experiences. Education is one of the major social factors that influence the demand for luxury travel services. Upscale travelers are often sophisticated and have in-depth knowledge of the products that they need. Thus, players in the industry have to understand the needs of the customers to succeed. Customers are increasingly becoming interested in learning about local cultures as part of their travel experience. High penetration of smartphone, computers, and the internet is the main technological factor that drives growth in the industry. In the last decade, the internet and mobile phones have emerged as the main delivery channel through which customers purchase luxury travel services. The stable political environment in the UAE continues to attract foreign direct investment (FDI) in the travel and hospitality industry in Dubai (IMF, 2014). This facilitates provision of luxury travel services by enhancing access to high quality accommodation, tourist attractions, and transportation services. Industry Analysis The luxury travel industry in Dubai was worth $72 billion in 2013. The industry recorded $15.33 billion in profits in 2013 (Dubai Chamber, 2014). The number of tourists is expected to increase from 10 million in 2013 to 20 million in 2020 (Dubai Chamber, 2014). Upscale travelers will account for 30% of the total number of tourists in the next five years. Overall, the luxury travel industry is expected to grow at an average rate of 9% in the next five years.Advertising We will write a custom report sample on Luxury Travel Services specifically for you for only $16.05 $11/page Learn More The main critical success factors in the industry include ability to differentiate products and to connect with customers. Effective management of the value chain also leads to success. Upscale customers are interested in tailor-made products. Thus, only companies th at are able to achieve high product differentiation are likely to succeed. Ability to connect with customers helps in understanding the salient product features that determine customer loyalty. Effective management of the value chain enables luxury travel agencies to collaborate with the right service providers such as high-class hotels and airlines to deliver their value proposition. Customer Analysis The luxury travel industry has four main segments namely, the old, business travelers, families, and the youth. In the old and family market segments, customers are interested in travel packages that offer personalized services and privacy. The customers are often interested in staying in high quality villas or private islands and tours that last for several days. The youth prefer simplicity and perfection. They are interested in travel packages that guarantee access to several destinations, cultural immersion, and high quality recreational facilities. In the business market segment, customers are interested in comfort, safety, and timeliness. Most business travelers are interested in short holidays. Customers usually begin the purchasing process by making inquiries about the services that are offered by various agencies. After identifying a suitable agency, the customer discusses his/ her needs with the sales team so that the travel service can be arranged. Once the customer pays for the selected package, the travel agencies and their partners such as hotels deliver the services. Other Brands The brands that Travel Attache competes with in Dubai include Sovereign Luxury Travel, Linara Travel, and Kuoni Travel. These brands are associated with high quality, reliability, and memorable travel experiences. The brands are well funded and have branches in nearly all continents. As a result, they are able to offer access to a large number of destinations. Travel Attache also symbolizes excellent quality, reliability, and unique destinations. In addition, it is associa ted with affordability.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Marketing Strategy Marketing Objectives The first objective will be to increase sales for the luxury travel services by 10% in the next 12 months. The expected robust economic growth and expansion of the industry will facilitate achievement of the sales target through high demand. The second objective will be to increase market share by 5% in the next 12 months. This objective is reasonable due to the fact that increased competition from foreign firms will limit the potential for increasing market share. The last objective will be to increase the number of destinations by 5% in the next 12 months. This objective is achievable because the company has the financial resources to extend its product line by introducing new tourist destinations. Customer Segments The company will focus on serving the affluent that are always ready to pay for high quality travel services. In this market, the segments that will be targeted include families, the youth, and the old. Small nuclear families tha t consist of parents with one or two children are normally the main customers in the families segment. Families are normally interested in spending special time together away from home to bond. Thus, they are likely to purchase luxury travel services that offer privacy, comfort, and access to unique recreational facilities. The youth consist of individuals in the age bracket of 17 to 25 years. They are interested in adventure, entertainment, and learning about new cultures. In this regard, they are likely to be interested in tailor-made luxury travel services that allow them to visit several tourist destinations in one trip. The old consist of individuals who are over 50 years. This segment consists of retirees who have a lot of time and financial resources to spend on high quality travel services. The old are likely to purchase the company’s services to enjoy the best travel experience. Brand/ Product Dream Brand Prism The brand prism has six aspects, which include physique, personality, culture, relationship, reflection, and self-image. Attache’s travel services are known for profound experiences and access to the most-sought-after destinations. The company’s brand personality is associated with fun, innovation, and flexibility. Its brand culture focuses on providing consistent and unique services that reflect customers’ expectations in a seamless and sophisticated way (Travel Attache, 2014). The brand’s relationship with the customers is to provide emotionally attached and personalized services that suit the needs of each client. The self-mage associated with the brand includes elegance, comfort, and authenticity. The reflection or the noble purpose of the brand is to enable customers to achieve their dream travel experience in an affordable and enjoyable manner. Brand Compass The company’s vision is to be the world’s premium luxury travel agency. Its mission is to enable the upscale traveler to discover the world (Travel Attache, 2014). Thus, the main objective of Attache’s brand is to enable customers to explore the world in a stylish and seamless manner. This objective ensures that the company’s services create value to the customers. The brand’s most compelling differentiating factor is its ability to deliver the core elements (where to go, when, and how) of a luxury trip in a highly personalized manner. Thus, the main attributes that define the company’s brand personality are exiting experiences, innovative travel solutions, and flexible travel plans. In sum, the company’s brand dream is to offer excellent luxury travel services that surpass the expectations of customers. Value Provided to the Customer Travel Attache’s customers will receive the following benefits. First, they will have access to the best tourist destinations in all the continents of the world. Second, customers will enjoy comfortable accommodation in over 200,000 world-cla ss hotels and private villas around the world. Finally, the company will charge competitive prices to enable customers to save on travelling costs. The link between the company’s brand dream and luxury is reflected in the characteristics of its services. The characteristics include rarity, extraordinariness, and quality. The company’s services are rare since most of its competitors provide standard rather than personalized luxury travel services. The quality of the services is very high since they are benchmarked by global standards (Travel Attache, 2014). Moreover, the services are extraordinary because of their affordability. The customer awareness that the company intends to create will focus on the uniqueness of its services. In particular, the company will use its marketing campaign initiatives to create awareness about the attributes that differentiate its services. These include affordability, consistency, flexibility, and unrivalled quality. As customers intern alize these attributes, brand identity will improve significantly. Marketing Mix Strategy Product The brand name that will be used to sell the services is Attache signature travel. The company will offer integrated luxury travel services that provide several benefits to the customers. This means that a single travel package will include accommodation, transportation, tour guide, and entertainment services. However, the customer will decide the services that will be included in each package. The benefits of the services include access to holiday destinations in over 100 countries, luxury car hire, yacht/ boat rentals, wellness services, and private jet leasing. In addition, customers will benefit from personalized VIP services and access to recreational facilities such as golf courses. Price The company will adopt the value-based pricing strategy to sell its services. This pricing strategy involves setting prices according to the benefits provided by the product. The choice of this s trategy has been informed by the fact that the benefits that will be offered by each travel package will depend on the services selected by the customer. Thus, it will ensure fairness to the customer and enable the company to generate adequate revenue. The average price of an integrated service will be $20,000. The rationale of this price is that it will enable customers to save on accommodation and transportation services that the company is able to book at favorable rates on behalf of its customers. The price also includes a 30% gross profit margin. Promotion The promotional mix that will be used to market the services include advertising, loyalty programs, and public relations. Advertising will be used to create brand awareness. The adverts will convey important information about the services such as their benefits and how to purchase them. Advertising will be done on TV and radio channels, as well as, travel/ lifestyle magazines and newspapers. The theme that will be used for th e print adverts is ‘travelling is a collection of unforgettable experiences. Let Attache be your guide’. Social media websites such as Google+, Twitter, and Facebook will also be used to advertise the services. The rationale of using public relations is that they will help in creating a strong brand image by influencing the public to develop a positive attitude towards the services. Loyalty programs will focus on rewarding customers for repeat purchases. This will improve brand loyalty. Place The services will be sold in all countries where the company has branches. This market coverage strategy will facilitate maximization of revenues. The main distribution channels will be the company’s offices and sales website. The offices will have knowledgeable sales executives who will advice customers on the best package to purchase. Customers will use the sales website to make inquiries and to purchase the services. The company will also use online sales platforms such a s eBay and Amzon.com to distribute its services. These platforms will improve access to the services by allowing customers to purchase them in any part of the world. Budget and Pro Forma Income Statement Budget and Breakeven Table 1 in the appendix shows that the promotional plan will cost $795,000 in the first year. The cost of each element of the promotional plan is summarized in table 1. Assuming a fixed cost of $2,352,500 in the first year, an average variable cost of $14,000/ package, and average revenue of $20,000/ package, breakeven can be calculated as: This implies that the company must sell at least 393 packages of its integrated luxury travel services to breakeven. Pro Forma Income Statement Table 2 shows that the company expects to realize $43,186,163 in total revenue in the first year. Moreover, the company expects to make a pre-tax profit of $7,163,538. These expectations are based on the assumption that sales will increase by 2.5% in every quarter. Moreover, rapid ec onomic growth is expected to facilitate achievement of the sales target by supporting demand. Conclusion The situation analysis indicates that there are immense growth opportunities in the luxury travel industry. The expected growth in demand will enable Travel Attache to launch and sell its integrated travel services successfully. The company should focus on product differentiation by providing high quality personalized services to overcome competition. In addition, the brand can be stretched by introducing luxury gift products such as wristwatches and souvenirs. This will involve brand image transfer where the gift products will be associated with the superior attributes of the luxury travel services. The rationale of brand stretching is that it will create new revenue streams that will improve the company’s profits. Appendix Table 1: Cost of each promotion activity Promotional Plan Budget Activity Cost ($) Advertising TV 120,000 Radio 80,000 Magazines 78,000 Newspaper 82,000 Sub-total 360,000 Public relations Press releases 10,000 Publications 50,000 Special events (shows) 150,000 Sub-total 210,000 Loyalty program Coupons/ loyalty cards 125,000 Competition 100,000 Sub-total 225,000 Total 795,000 Table 2: Pro forma income statement Pro Forma Income Statement ($) Quarter 1 Quarter 2 Quarter 3 Quarter 4 Annual Total revenue 10,400,000 10,660,000 10,926,500 11,199,663 43,186,163 Less Cost of sales 8,000,000 8,200,000 8,405,000 8,615,125 33,220,125 Gross profit 2,400,000 2,460,000 2,521,500 2,584,538 9,966,038 Expenses Accounting and legal fees 25,000 25,000 25,000 25,000 100,000 Marketing 198,750 198,750 198,750 198,750 795,000 Distribution 100,000 110,000 115,000 125,000 450,000 Administrative expenses 350,000 350,000 360,000 360,000 1,420,000 Miscellaneous 10,000 12,000 8,000 7,500 37,500 Less Total expenses 683,750 695,750 706,750 716,250 2,802,500 Profit before tax 1,716,250 1,764,250 1,814,750 1,868,288 7,163,538 References Czinkota, M., Ronkainen, I. (2012). International Marketing. New York, NY: McGraw-Hill. Dubai Chamber. (2014). Dubai Chamber analysis forecasts strong growth in UAE tourism sector. Web. IMF. (2014). United Arab Emirates: GDP forecast. Web. Kazmi, S. (2007). Marketing Management. London, England: Sage. Sivakumar, S. (2012). Luxury China: Market opportunities and potential. South Asian Journal of Global Business Research, 1(2), 314-317. Travel Attache. (2014). About us. Web. This report on Luxury Travel Services was written and submitted by user Kamren Baxter to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.