Business Proposal For An Innovative Transportation Essay For Tourism.

There is an assignment for transport and tourism , (innovative transportation product /service for tourism)

You are required to develop a Business Proposal for an innovative transport and tourism service-type product or experience. You should demonstrate your research skills and the ability to apply and integrate relevant tourism and transport theories, concepts and examples as they relate to your proposal.

As Students of entrepreneurs you plan to develop an innovative service-type product or experience to be utilised by visitors of a destination in Australia or another country, which you believe fulfils a gap in the market. The product or experience may be ‘new’ or adapted from another destination but you will have to justify why it is suitable for your chosen destination. It should facilitate more convenient, comfortable and interesting trips and experiences for tourists. You are in the fortunate position of having investors who may be willing to finance the operation, but first of all you must convince them that your proposed product is a worthwhile concept and one that will benefit the tourism industry.

The report should be analytical and evaluative in style and be based on research evidence rather than personal opinions, drawing on theories and concepts discussed throughout the semester. Use relevant examples to strengthen your analysis and to support your arguments.

Spa aviation, inspiration, concept, and potential application

Innovation is one of the major parts of any business that allow any company to introduce new products, services to their customer base, and attract potential customer towards the offerings (Farag & Lyons, 2012). In Transport and Tourism industry, innovation is the key  of increasing the reputation and profitability. In past five years aviation has been becoming more innovative and profitable area of travel and tourism industry. The report will introduce a new innovative idea named “Spa aviation” which is an in-flight spa facility.

The report will present the inspiration, concept and potential application planning for this new service. Apart from that, Feasibility and potential profitability will be also discussed with relevant in business models and theories. The appropriate marketing strategy will be designed along with financial estimation and implementation plan. The purpose of this report is to explore the most appropriate business planning for the new service named “Spa aviation” along with conducting the feasibility study while examining a potential growth and acceptability in consumer base (Nair et al., 2013).

In past five years aviation has been becoming more innovative and profitable area of travel and tourism industry where Personal mini bars, Luxury cabin, Birch box, Porsche Gate Transfer are getting more and more popularity and attention (Martínez-Garcia, Ferrer-Rosell & Coenders, 2012). Lufthansa Airline has already introduces their firs in-flight Humidifiers facilities in 2016. Emirates Airline has invested more than 20 million US Dollar for their new in-flight services named “in-flight steam bath and shower”. Surprisingly, the profit margin from first class has started to grow significantly (Swarbrooke & Horner, 2012).

Until now several international level airlines who are highly involved in Leisure tourism and transportation have introduced many innovative serve to their customers successfully. Inspired from these ideas in-flight spa facility can be more profitable and comprehensive innovative intervention within the leisure transportation business. “Spa Aviation” is a formal name of in-flight spa service where onboard passengers can have Spa service for almost 4 to 5 hours (Shaw, 2016). To implement this successfully, initially the plan can be implemented only for elite class passengers, who are more likely to prefer new experience by exploring new service and facility provided by the company.  In second stage of development, limiting the service within the first class passenger would be the most beneficial for the business.

In order to maintain the quality of service and maintenance of the in-flight spa facility additional cost can be added with the core ticket fare. The basic criteria of executing this service are the flight time should be more than 5 hours and the fuselage has enough space to accommodate all the related components. In a 5 hours flight the landing takes 45 minutes and takeoff takes another 45 minutes. Therefore, at least 3 hours will be available for the spa facility to be executed. This can be implemented in domestic airline flight path that takes more than 4 to 5 hours for transportation. It will help the company to develop the service providing facilities aligned with the client expectation and perception.

Feasibility and potential profitability in business model

This service will not only help the airline itself, it will also beneficial for other companies who will collaborate with the particular airline as a vendor company of spa facility. Apart from that introducing this service will require skilled workforce in the cabin crew that will take external as well as internal training. These training will be added in the aviation training institute to make the new service more competence and satisfactory (Pereira & Caetano, 2015). Currently the aviation and crew training organizations are seeking for new scope of trainings and development. Therefore, it will allow those organizations to incorporate the new spa service providing training. Recently, the cosmetic companies are producing several lotions and creams targeting the spa services. By incorporating this in aviation industry, those companies can be connected with the airline companies as core product supplier.

For estimating the most suitable marketing strategy, 5p of marketing strategic model can be used. It will allow any airline company to strategically choose the product, price, place, people and promotional strategy for the “Spa aviation” service. In the following section, these components of the strategy will be discussed:

Product: For introducing the in-flight spa facility, both products and services should be considered for marketing strategy. The product will be chosen by taking care of the quality and brand recognition though selecting appropriate vendor companies (Schneider, Spieth & Clauss, 2013). At the same time, the company can introduce different kinds of spa in this facilities namely Acupressure Massage, Deep Tissue Massage Spa, Aromatherapy, Ayurvedic message and Hot Stone spa. The company can also include different types of food products like fruits, vegetables, healthy processed foods and non alcoholic beverage within this facility.

Price: The price of the fare will depend on the time and packages of the spa facility chosen by a particular passenger. The cost will be added with the main fare of the ticket, which will enable the airline to present the viability of the new price with ethical considerations. It will help the company to develop the service providing facilities aligned with the client expectation and perception.

Place: Being a airline based business there will be lo particular place to expand the business. However, the in-flight spa facility can be initiated for the Sydney to Perth flight. Sydney to Perth takes almost 4 to 5 hours in flight and the passenger count in first class use to be high as well (Björkdahl & Holmén, 2013).

People: In consumer, related strategy the segmentation and targeting are essential. For this service, the customer base will be segmented by geographic, demographic, Behavioural, Psychographic and economic standard. The in flight spa service will target to upper middle class and upper class customer who have the potentiality to bare extra charge for in flight spa facility for their socio-psychological background influenced by their economic condition. Apart from that, the consumer groups will also segment consumer. Some specific spa packages like Deep Tissue Massage Spa, Ayurvedic message will be exclusively available for older people.

Promotion: In aviation industry, television and radio based promotional activities are not effective. Hence, for promotion the print media, social media and other online advertisement will be considered. Apart from that in the initial stage, the “spa aviation” can be delivered as a combo offer with other add-on in-flight upgraded facilities. The Aviation company can incorporate different packages for tickets including spa, family packages, facilities for older people and many others  to get adequate profit and also allow the consumers to fulfil their expectation of luxury travelling.  It will help to make the potential customer more accustomed with the new services and facilities (Foss & Saebi, 2017).

Marketing strategy

In order to implement the “spa Aviation” with sustainability and profitability appropriate budget plan and cost estimation is essential for any airline company. It will enable the organisation to distribute the investment with accuracy that can generate the target amount of profit from the early stage of implementation (Fernando, 2013). In the following table, the budget estimation has been presented:

Activity	Investment
Stakeholder analysis	1000AUD
Primary Communication	2000AUD
Meeting and decision making	20000AUD
Project planning and resource allocation	30000AUD
Internal Forecasting	1000AUD
Vendor selection	100000AUD
Negotiation and quality assurance	50000AUD
Workforce improvement and training	50000AUD
Marketing and Promotional activities	100000AUD
Direct and Indirect Feedback collection	20000AUD
Evaluation	200000AUD
TOTAL	5830000AUD

The implementation plan will help any airline company to develop their project accordingly while reducing the zero outcome investment and operational loophole. To impalement the in flight spa facility an organisation should executing stakeholder analysis, communication, decision making, vendor selection, logistics proportioning, recruitment, training and other sequential procedures (Lee & Hyun, 2016). The whole activity will be completed in the duration of 10 months. However, the evaluation process can be extended little longer after successfully initiating the procedure. The following table will show the step by stem implementation model with estimated durations.

Activity	1st month	2nd month	3rd month	4th month	5th month	6th month	7th month	8th month	9th month	10th month
Stakeholder analysis
Communication
Decision making
Financial planning
Forecasting
Vendor selection
Negotiation
Workforce improvement
Promotion
Feedback collection
Evaluation

Conclusion 

From the above analysis, it has been found that Aviation and airline business is one of the most essential parts of the Leisure tourism and transportation business, which allow the organizer to get adequate profit and also allow the consumers to fulfil their expectation of luxury travelling. It has been also found that, to implement this successfully, initially the plan can be implemented only for elite class passengers, who are more likely to prefer new experience by exploring new service and facility provided by the company. Apart from that introducing this service will require skilled workforce in the cabin crew that will take external as well as internal training.

From the above analysis and discussion it can be concluded that, in consumer related strategy the segmentation and targeting are essential. For this service the customer base will be segmented by economic measures. Apart from that in the initial stage the “spa aviation” can be delivered as a combo offer with other add-on in-flight upgraded facilities. Moreover.to impalement the in flight spa facility an organisation should executing stakeholder analysis, communication, decision making, vendor selection, logistics proportioning, recruitment, training and other sequential procedures.

In pre and post development of in-flight spa facility, any airline company should follow certain procedure to incorporate different packages for tickets including spa, family packages, facilities for older people and many others under legal compliances and regularities.

During the vendor selection and negotiation phase, the governing organisation should ensure the quality of the product. The poor quality product can make inverse growth in initial implementation. On the other hand, the high quality product with reputed brand partnership will improve the customer experience as well as profitability.

During the implementation procedure, the economic, demographic, psychographic and social perception of the target customer should be kept in mind. It will help the company to develop the service providing facilities aligned with the client expectation and perception.

In this era or digitalisation, social media and other online promotional activities would be the most effective advertisement strategy for in –flight spa service. It will help to reach the target customer base in very short time while expanding the tertiary client segment rapidly. Eventually it will be beneficial for overall business growth.

The airline company should also ensure that the flight time is more than 5 hours and the fuselage has enough space to incorporate the facility as add-on. Funding the Human Resource Management to recruit efficient workforce will be beneficial as well.

References

Björkdahl, J., & Holmén, M. (2013). Business model innovation–the challenges ahead. International Journal of Product Development, 18(3/4), 213-225.

Farag, S., & Lyons, G. (2012). To use or not to use? An empirical study of pre-trip public transport information for business and leisure trips and comparison with car travel. Transport Policy, 20, 82-92.

Fernando, Y. (2013). Service innovation along the chain of service process in airline business. In Outsourcing Management for Supply Chain Operations and Logistics Service (pp. 185-201). IGI Global.

Foss, N. J., & Saebi, T. (2017). Fifteen years of research on business model innovation: How far have we come, and where should we go?. Journal of Management, 43(1), 200-227.

Lee, K. H., & Hyun, S. S. (2016). An extended model of employees’ service innovation behavior in the airline industry. International Journal of Contemporary Hospitality Management, 28(8), 1622-1648.

Martínez-Garcia, E., Ferrer-Rosell, B., & Coenders, G. (2012). Profile of business and leisure travelers on low cost carriers in Europe. Journal of Air Transport Management, 20, 12-14.

Nair, S., Paulose, H., Palacios, M., & Tafur, J. (2013). Service orientation: Effectuating business model innovation. The Service Industries Journal, 33(9-10), 958-975.

Pereira, B. A., & Caetano, M. (2015). A conceptual business model framework applied to air transport. Journal of Air Transport Management, 44, 70-76.

Schneider, S., Spieth, P., & Clauss, T. (2013). Business model innovation in the aviation industry. International Journal of Product Development 12, 18(3-4), 286-310.

Shaw, S. (2016). Airline marketing and management. Routledge.

Swarbrooke, J., & Horner, S. (2012). Business travel and tourism. Routledge.

Yang, H., & Zhang, A. (2012). Effects of high-speed rail and air transport competition on prices, profits and welfare. Transportation Research Part B: Methodological, 46(10), 1322-1333.