Analysis of Holiday Tour Operators

Analysis of Holiday Tour Operators Chapter 1: Introduction Outline This research focuses on three UK holiday companies Kuoni, Thomas Cook and STA Travel and their marketing strategies. This research is comprised of following chapters: Rationale This study highlights many issues related to marketing of tourism companies; more specifically it will be looking at the three companies mentioned above and will be giving a broad analysis to marketing strategy as a marketing tool. The purpose of this dissertation is to conduct a detailed analysis on three different UK holiday companies which are Kuoni, Thomas Cook and STA Travel, who target different segments of the market. I believe that this investigation will broaden my understanding of the tourism marketing as well as the techniques and strategies that they use as a key factor to their success. (Morgan, 2001)Overall I believe that it is an interesting area to study because I can use and demonstrate while conducting this investigation the skills and knowledge that I had obtained while studying my degree. In addition, I have chosen to carry out my dissertation on the following three companies, because I believe that they differ in their market segmentation, however they have a common goal and they are competitors. I would like to introduce the companies that I will be focusing on and provide some brief introduction for each of them. But first of all let us talk about the role of tour operators. (Wang, 2002) Tour operators today play a very important role in creating the images of destinations. In this global capacity, they can significantly influence international tourism flows towards a country hit by safety and security risks. Even decisions of individual tourists on where to spend a holiday very often depend on the attitude and practice of tour operators towards a particular destination. But people have their own choices and preferences. In this paper we are going to analyse Kuoni, Thomas Cook and STA Travel tourism and travelling services as this is one of the best tour operator agencies world wide and the first choice of tourists. (Buhalis, 2001) From 1950 to 1998 the number of international tourist arrivals in the world increased from 25 million to 635 million (WTO 1999b), with an average annual increase of 6.97%. Over the past 15 years, international tourism receipts have grown 1.5 times faster than world GDP, with no signs of slowing down. In 1998 international tourism accounted for an estimated 8% of the worlds total earnings and 37% of exports in the service sector (WTO 1999a). According to data from the International Monetary Fund, in 1998 international tourism receipts and passenger transport amounted to more than $504 billion, putting it ahead of all other categories of international trade (automotive products, chemicals, food, petroleum and other fuels, computer and office equipment, textiles and clothing, mining products, etc.). (Driver, 1999) This rapid development of international tourism can partly be explained by the xxpackage holidays promoted nationally and internationally. Indeed, tour operators represent one of the most powerful and most influential entities in the tourism industry. They have a strong influence on international flows from main generating markets to various destinations. According to World Tourism Organization estimates, tour operators nowadays have a share of about 25% in the total international tourism market. This means that in 2000 tour operators organized at least 175 million international tourism trips. Therefore, the success of many destinations depends on whether foreign tour operators include them in their programs. (Buhalis, 1998) Travel Industry As the travel industry consists of numerous sectors and divisions, companies within the industry vary greatly in their activities and the segments of the market they are involved in. Three of them Kuoni, Thomas Cook and STA Travel leaders in their respective field and I would like to commence with Kuoni in the following segment. (Riege, 2000) Introduction to Kuoni, Thomas Cook and STA Travel Companies Kuoni Travel Holding Ltd. oversees one of Europes top five travel and tour groups. Based in Zurich, Switzerland, the company is particularly strong in both its domestic and U.K. markets, but is also present throughout Europe, especially in Scandinavia, with a rising presence in the United States and Asian markets. Kuoni Travel operates in three primary areas of business: Leisure Travel, which accounts for more than 85 percent of the companys sales; Business Travel, through its BTI unit, which handles travel coordination activities for the small and mid-sized and large-scale corporation markets; and Incoming Services, which provides travel destination services, such as touring and sightseeing packages. (Morrison, 1994)The company markets it high-end tours and travel packages under the Kuoni name. Discount travel packages are offered under the Helvetica brand name. Switzerland remains the companys single largest market, representing slightly less than one-third of its total sales. The U.K. and North American markets together provide less than one-third of sales. The European continent, including Scandinavia, added another roughly 30 percent to Kuonis total sales, which topped SFr 4 billion in 1996. (Schonland and Williams, 1996) Kuoni has been stepping up the pace of its acquisitions at the turn of the century. After being disapponited in its attempt to merge with the United Kingdoms First Choice Holidays Plc, which would have helped the company create a counterweight to Europes market-leading Preussag-Thomson alliance announced in early 1999, Kuoni has changed direction, targeting the Scandinavian, Indian, and North American markets for its future growth. (Weber and Roehl, 1999)Listed on the Swiss stock exchange, Kuoni is led by Chairman Daniel Affolter and President and CEO Hans Lerch. (Bonn and Furr, 1999) A native of Chur, Switzerland, Alfred Kuoni moved to Zurich to open a travel agency in 1906. If the companys nameTravel Bureauwas not all that original, Kuoni quickly established itself as a pioneer in exotic travel destinations. One of the companys first organized tour packages took Swiss citizens on a guided tour to far-off Egypt. (Hu, 1996) In 1925, Kuoni reincorporated as a joint-stock company, with shares remaining within the Kuoni family. Through the years leading up to World War II, Kuoni expanded from its original location to include a number of sales offices throughout Switzerland. Despite its success in its home market, the company recognized early on that Switzerland was too small for its growing ambitions. The company also opened its first international office, in Nice, in the south of France. Further international moves were not realised due to the buildup to and outbreak of World War II. (Baker and Hozier, 1994) Kuonis international expansion began almost immediately after the end of the war. In 1948, the company opened its first international subsidiaries, in Italy and France. Kuoni also continued to venture to new and exotic travel destinations, such as the organization of the first charter flights to Africa. (Pizam and Mansfeld, 1999)In 1957, the Kuoni family established the Kuoni and Hugentobler Foundation under which to group their holding; much later, with Kuonis public listing, the foundation would became the companys primary shareholder. (Dev and Olsen, 2000) Thomas Cook AG is an international leisure group, created in 2000 by CN Touristics purchase of Britains Thomas Cook Holdings Ltd., with roots tracing back to 1841. (Bitner and Booms, 1982 )The company is represented in the sales markets of Germany, Great Britain, Ireland, France, Belgium, Luxembourg, the Netherlands, Austria, Hungary, Poland, Slovakia, Slovenia, Egypt, India and Canada, providing products and services in most market segments, including airlines, hotels, tour operators, travel and incoming agencies. Thomas Cook AG is the third largest integrated tourism group in the world, serving some 14 million customers. Thomas Cook AG, encompasses 32 tour operators and around 3,600 travel agencies, selling the groups products worldwide, as well as a portfolio of 76,000 controlled hotel beds, a fleet of 87 aircraft and a workforce numbering some 28,000. Its services also include travel shops and charter airlines. (Koh, 1995) Evidently, the scale of operations of Thomas Cook AG in his respective market, has allowed him to realize economy of scale, affording a strong advantage over competition and in turn benefiting his clients. Because of the large volume of business provided to many resorts by Cook, he currently have excellent buying power, enabling him to negotiate the best possible airfare, hotel rates and transfer rates, which are translated into attractive selling prices, better rooms and overall greater value for his clients. Numerically, Cook has realized triumphs and broken records in his area. In 1993, Thomas Cook AG excels, as it achieved sales of some eight billion Euros and served more that 13 million customers in the 2001-2002 financial year alone. (Ioannides and Debbage, 1997)In appreciation of his expertise and as an acknowledgement of his proficiency in his operations, Thomas Cook AG has both received numerous awards and tributes over the years for a variety of enterprises. For example, th e Mexican government awarded the Best Tour Operator Worldwide Award in 1998. Thomas Cook AG is nominated every year in several categories in the World Travel Awards, as well as having its various subsidiaries and companies receive numerous awards worldwide. (Riege and Perry, 2000) STA Travel, a subsidiary of privately held Diethelm Keller Holding Ltd., markets itself as â€Å"the world’s largest student travel organization helping students travel in over 90 countries.† STA Travel specializes in student travel, a market niche accounting for approximately 20% of all travel bookings. In 2005 STA Travel reported revenues of 215 Million CHF (Swiss Francs) on total transactions of 1,542 CHF, down from 241 on 1539 the previous year. That same year, the firms 2,358 employees working from 375 travel agency offices in 17 countries and through franchises in 83 others, provided travel advice and booking services to approximately 6 million travelers. (Fick and Ritchie, 1991) Founded in 1979, STA Travel had grown and expanded its global reach through a series of mergers and acquisitions. While the brand well known in parts of Europe and Australia, where it had operated for many years, STA Travel’s US brand, born with the acquisition in 2003 of Council Travel, was still less well known. Historically, STA Travel reached its customers through retail travel agencies, many located near or on college campuses. Beginning in the 1990’s, however, the internet brought new online competitors. Among these were Student Universe and Student City as well as less focused on line providers of travel services including Travelocity and Expedia. By 2007 the internet was predicted to account for more bookings than offline alternatives. Aims and Objectives Following are the aims and objectives of this study: Introduction to Kuoni Holiday Company Introduction to Thomas Cook Holiday Company Introduction to STA Travel Holiday Company Marketing strategy of these companies Research Questions The study seeks to answer the following questions: â€Å"An investigation into the marketing strategy of three UK holiday companies who target the different sections of society with reference to their marketing strategy.† (Kuoni, Thomas Cook and STA Travel) Chapter 2: Literature Review Role of Tour Operators The role of tour operators unlike the travel agencies who sell holiday and a range of other travel products tour operators actually assemble the component parts of a holiday, package holidays i.e. the means of travel, accommodation, facilities, transfers, excursion and other services. The famous name which comes into my minds is Thomas Cook for their packages and services. (Field, 1999) If we consider that the travel agents are the retailer arm of the travel business, then the tour operators can be linked to wholesalers, since they buy in bulk from the providers of travel services, such as the hoteliers and airlines, break the bulk into manageable packages and offer the finished product the inclusive tour for sale to the travel agencies or direct to the consumer. (Kaynama and Black, 2000) Peace, safety, and security are the primary conditions for the normal tourism development of a destination, region, or country and thus are the basic determinants of its growth. Without them, destinations cannot successfully compete on the generating markets, even if they present in their marketing campaigns the most attractive and best quality natural and built attractions. Tourism contributes to peace as much as it benefits from it (Savignac 1994). According to Pizam (1999), every minute of every day a crime or a violent act occurs at a destination somewhere in the world. At the same time, it would be difficult to deny that many types of safety risks co-exist in everyones daily lives, and within tourism as well. However, an important difference exists: People are rarely in a position to change their place of living, but nothing can force them to spend a holiday in a place that they perceive as insecure. (Kaynama and Black, 2000)The basic requirement of contemporary demand is higher quality supply and services, and that quality has become the most important factor in the existing climate and development of that demand. But usually do not mention factors which are the condition sine qua non—peace, safety, and security, now generally taken for granted. Any threats to the safety of tourists causes a decrease or total absence of activity, not only in a particular destination, but also very often in neighbouring regions or countries as well. Consequently, since tourism is an important contributor to national economies, host countries will find it necessary to take substantial measures to bring the country hit by crisis back onto the market as quickly as possible. Taking the example of three companies discussed below we further try to explore their role and business strategy. (Medlik and Wang, 2002) Kuoni, Holiday Company Kuoni began looking farther afield in the 1960s. In 1963, the company made its first entry into the Asian markets with the opening of a branch office in Japan. (Medlik and Wang, 2002 )Two years later, Kuoni entered what was later to become one of its most important single markets when it acquired the United Kingdoms Challis Benson Ltd. The importance of the U.K. market to Kuoni was seen at the beginning of the 1970s when the company changed its nameand its U.K. operations nameto Kuoni Travel Ltd. (Buhalis, 1998) The companys listing on the Swiss stock exchange provided fuel for new growth, while opening up the companys shares to new partners, including SwissAir, which built up a 30 percent share in Kuoni. The public listing enabled the company to step up its international growth. After opening a subsidiary in Austria at the beginning of the decade, Kuoni now launched subsidiaries in Germany and Spain, both in 1973, and a subsidiary in Greece the following year. The year 1974 also saw Kuoni step up its position in the U.K. market, when it acquired Houlders World Holidays, based in England. (Buhalis, 1998) While building up its international network, Kuoni also was launching new products. In 1977, the company began marketing its first around-the-world tour. In the 1980s, Kuoni began to acquire properties in many of its most popular destinations, adding a number of hotels, including the Hawksbill Beach Hotel in Antigua in 1981 and the Discovery Bay Beach Hotel in Barbados, bought in 1984. In 1986, Kuoni became the first tour operator to offer around-the-world charter flights on the Concorde supersonic jet. (Morrison, 1996)Although this latter product catered to the companys strong high-end and high-margin clientele, Kuoni also launched a new brand name, Helvetica, to encompass its discount tour and travel operations. The worldwide travel industry remained highly fragmented in the 1990s, with numerous small-scale operators competing against a smaller number of quickly growing industry heavyweights. Kuoni, which had already captured the lead in the Swiss market, was determined to maintain a leadership position as the travel industry headed into a drawn-out consolidation drive leading up to the turn of the century. The company acquired Reiseburo NUR Neckermann in 1987, boosting its position in the Austrian market. Three years later, the company regrouped its Austrian activities, launching the NUR Neckermann Reisen AG joint venture with Germanys Neckermann Touristic. Kuonis part of the joint venture remained at 49 percent. (Morrison, 1996) Back home, the company continued to consolidate its dominance of the Swiss market, acquiring Privat Safaris, the countrys leading operator of tours to eastern Africa, and Reiseburo Popularis, which combined retail offices with direct sales operations marketing discount tour and travel packages. Yet Kuonis strong position in the Swiss market and its growing share internationally soon led it to become the target of a takeover attempt. The sale of SwissAirs 30 percent holding created the opening for Germanys Krauthof AG department store group to acquire a 50.1 percent majority of Kuoni in 1992. (Middleton, Clarke, 2001) Kuoni, through the Kuoni and Hugentobler Foundation, nonetheless retained majority control of the companys voting rightswhich provided the leverage to the resolution of the takeover attempt. In 1995, the Kuoni and Hugentobler Foundation bought out Krauthofs stake in the company. The company then changed its name to Kuoni Travel Holding, a move that also reflected a new diversification drive: in 1995 the company acquired Danzas Reisen AG, a Switzerland-based specialist in business travel services. The Danzas acquisition led Kuoni to create a dedicated business travel unit. The company also acquired retailer Kewi Reisen, while integrating its majority share of Railtour Suiss SA, acquired the year before. With its independence assured, Kuoni launched its own acquisition drive in the late 1990s. In 1996, Kuoni added Frances Voice SA, and Scanditours, focused on the Nordic region. (Middleton, Clarke, 2001)The company moved into The Netherlands with the acquisition of Special Traffic that same year. Kuoni also looked to the potentially huge market of India for the first time, acquiring SOTC Holiday Tours, which provided the basis for its Kuoni India Ltd. subsidiary. Two other acquisitions completed the companys busy years, those of Rotunda Tours, expanding Kuoni into South Africa, and CIS Intersport, a Swiss company catering to the growing demand for sports-oriented holiday packages. In 1996, also, the companys Edelweiss Air launched its charter flight operations. (Walle, 1996) Kuonis expansion campaign continued strongly through the end of the century, including the launch of the P O Travel Ltd. joint venture with Peninsular and Oriental Steam Navigation Company, based in Hong Kong, with offices in Bangkok and Singapore. The 1997 joint venture strengthened Kuonis position in the Asian market, which, despite the austere economic climate in the region at the end of the decade, promised to become one of the worlds stronger holiday markets. Closer to home, Kuoni continued lining up acquisitions, especially Voyages Jules Verne, a U.K. upscale tour operator, and Switzerlands Manta Reisen, which specialized in scuba and other deep-sea holidays. The company also acquired German business travel specialist Euro Lloyd Reisenburo, which it combined with its other German operations into the new subsidiary BTI Euro Lloyd, one of that markets top five business travel companies. Also in 1998, Kuoni launched a joint venture with Italys Gastaldi Tours. The next year Kuoni face a major setback. At the beginning of 1999, the company announced its agreement to merge with the United Kingdoms number three travel operator, First Choice Holidays. The merger, agreed to by both sides, was thwarted by a surprise takeover attempt from rival U.K. operator Airtours Plc, which offered a higher per-share price. When the majority of First Choices shareholders chose to back the Airtours offerwhich itself was blocked by the European monopolies commissionKuoni pulled out of the merger talks. The First Choice merger might have allowed Kuoni to become not only a major player in the U.K. travel market but to boost its position to the top ranks in all of Europe. After the collapse of the merger, however, Kuoni redirected its strategy to other markets. Three markets in particular were to receive its attention: the United States, Scandinavia, and India. In 1999, Kuoni acquired upscale travel company Intrav, based in St. Louis, Missouri; the Intrav acquisition, which cost Kuoni $115 million, gave it a strong opening into the booming U.S. market for luxury vacations. The following year, the company acquired T Pro, an incoming services specialist based in New York and the number three incoming services provider to the U.S. market. The year 2000 saw Kuoni not only strengthen its hold on the Swiss travel markettaking a 49 percent share in ITV, Switzerlands third largest tour group and subsidiary of Germanys Preussagbut also expand its presence in its new target markets of Scandinavia and India. The first was served by the acquisition of 49 percent of Apollo Resor, based in Stockholm, Sweden, and then boosted by the acquisition of Denmarks Dane Tours. In March 2001, the company announced its decision to restructure most of its Scandinavian holdings into a single subsidiary. Thomas Cook Holiday Company Thomascook.com has pledged to bring in a quarter of sales through its website in 2006 and appointed a new digital agency to plan and buy all online media.The move will include an increase in online advertising spend of around 50% and will see an integration between traditional campaigns in print and outdoor with online marketing. Harvest Digital will take on all online media planning and buying through existing travel portals, plus drive a new strategy with the likes of Metro.co.uk, GM.TV and the Lonely Planet websites.Head of online marketing at Thomas Cook, Manuel Mascarenhas, said: â€Å"We selected Harvest Digital because they have delivered on an imaginative plan, using competitions, contextual advertising and sponsorships against tight CPA targets. They have a core audience of repeat bookers and want to ensure we continue to acquire new customers online. The new marketing strategy will target what has been labelled the lucrative and web-savvy audience of 35 to 45 year olds that several holidays a year, including packages, flights, ski holidays and cruises. Harvest Digital partner Emma Wilson added that Thomas Cook is the oldest name in travel but has a very contemporary approach within its sales channels. Also Thomas Cook Signature has won the award for Best Long Haul Operator at last years British Travel Awards, receiving 31% of the vote, while in 2002 Thomas Cook India Ltd has been awarded the Institute of Directors prestigious Golden Peacock National Award for excellence in corporate governance, awarded for transparency, excellence in conducting business at various levels of management, social and environmental responsibility, ethical business practice and consistent creation of value for all the stake holders. Thomas Cook Group has acquired Elegant Resorts, the Chester-based luxury travel firm with 160 staff and gross assets of  £22m. Thomas Cook acquired Hotels4U.com from Centurion Holiday Group for an initial  £22m. This company closed 150 travel shops and six offices throughout the country with the loss of up to 2,800 jobs, affecting sites in Rochdale, Manchester, Rawtenstall and Denton; not only this but Thomas Cook based 40 head office jobs in London following its merger with Mytravel, but this is not expected to affect the jobs at its existing headquarters in Peterborough. Apart from this, Thomas Cook of Peterborough merged with MyTravel of Rochdale to form a combined holidays business with more than 32,000 staff, Thomas Cook is to conduct a strategic review of its UK tour operating business, prompting speculation that it will seek buyers for Club 18-30, Style villa holidays, Neilson skiing and Sun World. Accenture has won a  £110m 10-year contract from Thomas Cook to set up an IT and finance service centre, which will involve the transfer of about 400 Thomas Cook staff. Thomas Cook has launched a branded digital TV channel, which features its full range of holidays and other travel products; also reduced costs in its European travel business by shedding 2,600 jobs, closing 100 shops and grounding four aircraft. Today, Thomas Cook is a leading travel company and one of the most widely recognised and respected brands in the world. Employing over 11,000 staff, Thomas Cook operates throughout a network of 616 locations in the UK and overseas. The company is wholly owned by Thomas Cook AG (formerly CN Touristic AG), which announced its acquisition of Thomas Cook in December 2004 and was granted EC approval in March 2005. (Marvell, 2005) Thomas Cook AG is now the second largest travel group in Europe and the third largest in the world. One reason for the companys longevity and continued success is its commitment to providing exceptional service. Thomas Cook once described himself as the willing and devoted servant of the travelling public. Today, 160 years after his pioneering excursion, these words remain a fitting epithet to the company he founded. (Bloch and Segev, 1997) Thomas Cook, a major UK Tour Operator, has signed an agreement to pilot AXS-Ones new AXSPoint(R) electronic invoice delivery service to travel agents. The new AXSPoint service, which has been approved by the Civil Aviation Authority (CAA), a UK regulatory body for use by tour operators holding an Air Travel Organisers Licence (ATOL), will eliminate the need for tour operators to issue hard copy invoices to travel agents, thereby providing tour operators such as Thomas Cook Holidays with potential savings of up to 80 percent on their annual invoice distribution costs. For travel agents involved in the Pilot program, invoices will now arrive electronically on the same day as dispatch. The AXSPoint service will offer travel agents the ability to automatically match and reconcile invoices to bookings, thereby reducing administration costs and allowing quicker turn-around of invoices to the agents customer. (Richer and James, 1998) The AXSPoint service will significantly enhance the service we provide to our travel agent customers and the service they provide their customers in turn, commented Manny Fontenla Novoa, Chief Executive Officer, Thomas Cook (UK). The speed and efficiency of electronic distribution will reduce our costs considerably while benefiting agents and customers alike. Commenting on the development, Mark Donkersley, Managing Director, AXS-One UK, said: While Thomas Cook is the first tour operator to pilot this system, we are receiving strong interest from other tour operators and travel agents. The issuing of paper invoices has been expensive to tour operators and agents alike in terms of money, time and customer service. Today, this activity costs the regulated tour industry over $25 million per year and we are currently working with the leaders of this sector to bring them on board our system. By providing these services electronically, and securely, we save them a considerable amount of money, while at the same time adding value to each part of the distribution chain and generating recurring revenue streams for AXS-One. (Richer and James, 1998) Superficially, the differences between Thomas Cook AG and other agencies are evident, as one is a national tour operator, while the others are global travel conglomerates. Nevertheless, if we examine deeper below the surface and truly analyze other companies, we can appreciate the great difference between Cook and others’ services. All the agencies have become trusted and highly respected in their markets, as well as being among the best-known names in them, but Cook’s services is most appreciated by his customers. This is the reasons his company is the most preferred one. Thus, we can infer that Cook has the same presence and effect in his comparative market, it being tour operation in the U.S. for other companies and the world for Thomas Cook AG. (Trochim, 2001) STA Travel Company To be responsive to their globally dispersed and culturally diverse customer base STA Travel sought to â€Å"delegate as much autonomy, responsibility and authority as close to the action as possible,† while using a single integrated information system â€Å"to provide global support and solutions when that can improve their experience.† They described this philosophy, ‘as local as possible, as global as necessary’. An evolving business strategy called One Company sought to â€Å"align business operations with customer needs across the world†. Global teams were charged with developing and delivering â€Å"a single supplier strategy, one service standard, one set of operating standards and guidelines for management of our corporate identity†. To support that model the company was providing BLUEe, â€Å"a single sales and booking system to every STA Travel point of purchase backed by a single network, infrastructure, finance, and reporting syst em.† (Trochim, 2001) To ensure they remained â€Å"as local as possible,† each major country maintained its own sales and marketing arms. While most country’s home web page was consistent in look and feel, country marketers were each free to design their marketing campaigns including methods to harness the internet. The US office, for instance had run a successful viral marketing campaign called â€Å"body shots,† intended to promote spring break in the U.S. They had also initiated advertising on Facebook and Myspace, two sites popular with the demographics desirable by the firm. The STA Travel U.S. website, itself was a popular destination, registering some 600,000 unique visitors each month. Over 400,000 customers and prospective customers also contact the U.S. Division each month by email. The STA Travel’s North American division’s had initiated development of STATRAVEL193.COM, a highly interactive web site featuring video reports from STA customers about travel destinations. (Gall Borg, 2003)They had also been the first division to explore the possibilities of Second Life as a marketing tool. The idea had received a welcome endorsement, and a matching investment, from STA Travels headquarters in the U.K. Craig Hepburn, STA Travels Global Webmaster, was responsible for the content management system that fed the various country websites and that was being rolled out throughout the world. His team had also supported development of personalized travel blogs, that allowed STA Travel customers to document their travel. Hepburn was enthusiastic about SL as a marketing channel, but knew it would be met with resistance by the marketing departments in other countries. The initial strategy STA Travel had conceived for their web presence had two prongs. The first element was to create several destination islands to attract prospective travelers. For instance, one idea was to create an island featuring the great wall of China. The second element of the plan was to hold a machinima competition among current Second Life residents. Machinima, a style of movie making, uses avatars as members of the cast; the movie is then filmed in the context of a virtual wor Analysis of Holiday Tour Operators Analysis of Holiday Tour Operators Chapter 1: Introduction Outline This research focuses on three UK holiday companies Kuoni, Thomas Cook and STA Travel and their marketing strategies. This research is comprised of following chapters: Rationale This study highlights many issues related to marketing of tourism companies; more specifically it will be looking at the three companies mentioned above and will be giving a broad analysis to marketing strategy as a marketing tool. The purpose of this dissertation is to conduct a detailed analysis on three different UK holiday companies which are Kuoni, Thomas Cook and STA Travel, who target different segments of the market. I believe that this investigation will broaden my understanding of the tourism marketing as well as the techniques and strategies that they use as a key factor to their success. (Morgan, 2001)Overall I believe that it is an interesting area to study because I can use and demonstrate while conducting this investigation the skills and knowledge that I had obtained while studying my degree. In addition, I have chosen to carry out my dissertation on the following three companies, because I believe that they differ in their market segmentation, however they have a common goal and they are competitors. I would like to introduce the companies that I will be focusing on and provide some brief introduction for each of them. But first of all let us talk about the role of tour operators. (Wang, 2002) Tour operators today play a very important role in creating the images of destinations. In this global capacity, they can significantly influence international tourism flows towards a country hit by safety and security risks. Even decisions of individual tourists on where to spend a holiday very often depend on the attitude and practice of tour operators towards a particular destination. But people have their own choices and preferences. In this paper we are going to analyse Kuoni, Thomas Cook and STA Travel tourism and travelling services as this is one of the best tour operator agencies world wide and the first choice of tourists. (Buhalis, 2001) From 1950 to 1998 the number of international tourist arrivals in the world increased from 25 million to 635 million (WTO 1999b), with an average annual increase of 6.97%. Over the past 15 years, international tourism receipts have grown 1.5 times faster than world GDP, with no signs of slowing down. In 1998 international tourism accounted for an estimated 8% of the worlds total earnings and 37% of exports in the service sector (WTO 1999a). According to data from the International Monetary Fund, in 1998 international tourism receipts and passenger transport amounted to more than $504 billion, putting it ahead of all other categories of international trade (automotive products, chemicals, food, petroleum and other fuels, computer and office equipment, textiles and clothing, mining products, etc.). (Driver, 1999) This rapid development of international tourism can partly be explained by the xxpackage holidays promoted nationally and internationally. Indeed, tour operators represent one of the most powerful and most influential entities in the tourism industry. They have a strong influence on international flows from main generating markets to various destinations. According to World Tourism Organization estimates, tour operators nowadays have a share of about 25% in the total international tourism market. This means that in 2000 tour operators organized at least 175 million international tourism trips. Therefore, the success of many destinations depends on whether foreign tour operators include them in their programs. (Buhalis, 1998) Travel Industry As the travel industry consists of numerous sectors and divisions, companies within the industry vary greatly in their activities and the segments of the market they are involved in. Three of them Kuoni, Thomas Cook and STA Travel leaders in their respective field and I would like to commence with Kuoni in the following segment. (Riege, 2000) Introduction to Kuoni, Thomas Cook and STA Travel Companies Kuoni Travel Holding Ltd. oversees one of Europes top five travel and tour groups. Based in Zurich, Switzerland, the company is particularly strong in both its domestic and U.K. markets, but is also present throughout Europe, especially in Scandinavia, with a rising presence in the United States and Asian markets. Kuoni Travel operates in three primary areas of business: Leisure Travel, which accounts for more than 85 percent of the companys sales; Business Travel, through its BTI unit, which handles travel coordination activities for the small and mid-sized and large-scale corporation markets; and Incoming Services, which provides travel destination services, such as touring and sightseeing packages. (Morrison, 1994)The company markets it high-end tours and travel packages under the Kuoni name. Discount travel packages are offered under the Helvetica brand name. Switzerland remains the companys single largest market, representing slightly less than one-third of its total sales. The U.K. and North American markets together provide less than one-third of sales. The European continent, including Scandinavia, added another roughly 30 percent to Kuonis total sales, which topped SFr 4 billion in 1996. (Schonland and Williams, 1996) Kuoni has been stepping up the pace of its acquisitions at the turn of the century. After being disapponited in its attempt to merge with the United Kingdoms First Choice Holidays Plc, which would have helped the company create a counterweight to Europes market-leading Preussag-Thomson alliance announced in early 1999, Kuoni has changed direction, targeting the Scandinavian, Indian, and North American markets for its future growth. (Weber and Roehl, 1999)Listed on the Swiss stock exchange, Kuoni is led by Chairman Daniel Affolter and President and CEO Hans Lerch. (Bonn and Furr, 1999) A native of Chur, Switzerland, Alfred Kuoni moved to Zurich to open a travel agency in 1906. If the companys nameTravel Bureauwas not all that original, Kuoni quickly established itself as a pioneer in exotic travel destinations. One of the companys first organized tour packages took Swiss citizens on a guided tour to far-off Egypt. (Hu, 1996) In 1925, Kuoni reincorporated as a joint-stock company, with shares remaining within the Kuoni family. Through the years leading up to World War II, Kuoni expanded from its original location to include a number of sales offices throughout Switzerland. Despite its success in its home market, the company recognized early on that Switzerland was too small for its growing ambitions. The company also opened its first international office, in Nice, in the south of France. Further international moves were not realised due to the buildup to and outbreak of World War II. (Baker and Hozier, 1994) Kuonis international expansion began almost immediately after the end of the war. In 1948, the company opened its first international subsidiaries, in Italy and France. Kuoni also continued to venture to new and exotic travel destinations, such as the organization of the first charter flights to Africa. (Pizam and Mansfeld, 1999)In 1957, the Kuoni family established the Kuoni and Hugentobler Foundation under which to group their holding; much later, with Kuonis public listing, the foundation would became the companys primary shareholder. (Dev and Olsen, 2000) Thomas Cook AG is an international leisure group, created in 2000 by CN Touristics purchase of Britains Thomas Cook Holdings Ltd., with roots tracing back to 1841. (Bitner and Booms, 1982 )The company is represented in the sales markets of Germany, Great Britain, Ireland, France, Belgium, Luxembourg, the Netherlands, Austria, Hungary, Poland, Slovakia, Slovenia, Egypt, India and Canada, providing products and services in most market segments, including airlines, hotels, tour operators, travel and incoming agencies. Thomas Cook AG is the third largest integrated tourism group in the world, serving some 14 million customers. Thomas Cook AG, encompasses 32 tour operators and around 3,600 travel agencies, selling the groups products worldwide, as well as a portfolio of 76,000 controlled hotel beds, a fleet of 87 aircraft and a workforce numbering some 28,000. Its services also include travel shops and charter airlines. (Koh, 1995) Evidently, the scale of operations of Thomas Cook AG in his respective market, has allowed him to realize economy of scale, affording a strong advantage over competition and in turn benefiting his clients. Because of the large volume of business provided to many resorts by Cook, he currently have excellent buying power, enabling him to negotiate the best possible airfare, hotel rates and transfer rates, which are translated into attractive selling prices, better rooms and overall greater value for his clients. Numerically, Cook has realized triumphs and broken records in his area. In 1993, Thomas Cook AG excels, as it achieved sales of some eight billion Euros and served more that 13 million customers in the 2001-2002 financial year alone. (Ioannides and Debbage, 1997)In appreciation of his expertise and as an acknowledgement of his proficiency in his operations, Thomas Cook AG has both received numerous awards and tributes over the years for a variety of enterprises. For example, th e Mexican government awarded the Best Tour Operator Worldwide Award in 1998. Thomas Cook AG is nominated every year in several categories in the World Travel Awards, as well as having its various subsidiaries and companies receive numerous awards worldwide. (Riege and Perry, 2000) STA Travel, a subsidiary of privately held Diethelm Keller Holding Ltd., markets itself as â€Å"the world’s largest student travel organization helping students travel in over 90 countries.† STA Travel specializes in student travel, a market niche accounting for approximately 20% of all travel bookings. In 2005 STA Travel reported revenues of 215 Million CHF (Swiss Francs) on total transactions of 1,542 CHF, down from 241 on 1539 the previous year. That same year, the firms 2,358 employees working from 375 travel agency offices in 17 countries and through franchises in 83 others, provided travel advice and booking services to approximately 6 million travelers. (Fick and Ritchie, 1991) Founded in 1979, STA Travel had grown and expanded its global reach through a series of mergers and acquisitions. While the brand well known in parts of Europe and Australia, where it had operated for many years, STA Travel’s US brand, born with the acquisition in 2003 of Council Travel, was still less well known. Historically, STA Travel reached its customers through retail travel agencies, many located near or on college campuses. Beginning in the 1990’s, however, the internet brought new online competitors. Among these were Student Universe and Student City as well as less focused on line providers of travel services including Travelocity and Expedia. By 2007 the internet was predicted to account for more bookings than offline alternatives. Aims and Objectives Following are the aims and objectives of this study: Introduction to Kuoni Holiday Company Introduction to Thomas Cook Holiday Company Introduction to STA Travel Holiday Company Marketing strategy of these companies Research Questions The study seeks to answer the following questions: â€Å"An investigation into the marketing strategy of three UK holiday companies who target the different sections of society with reference to their marketing strategy.† (Kuoni, Thomas Cook and STA Travel) Chapter 2: Literature Review Role of Tour Operators The role of tour operators unlike the travel agencies who sell holiday and a range of other travel products tour operators actually assemble the component parts of a holiday, package holidays i.e. the means of travel, accommodation, facilities, transfers, excursion and other services. The famous name which comes into my minds is Thomas Cook for their packages and services. (Field, 1999) If we consider that the travel agents are the retailer arm of the travel business, then the tour operators can be linked to wholesalers, since they buy in bulk from the providers of travel services, such as the hoteliers and airlines, break the bulk into manageable packages and offer the finished product the inclusive tour for sale to the travel agencies or direct to the consumer. (Kaynama and Black, 2000) Peace, safety, and security are the primary conditions for the normal tourism development of a destination, region, or country and thus are the basic determinants of its growth. Without them, destinations cannot successfully compete on the generating markets, even if they present in their marketing campaigns the most attractive and best quality natural and built attractions. Tourism contributes to peace as much as it benefits from it (Savignac 1994). According to Pizam (1999), every minute of every day a crime or a violent act occurs at a destination somewhere in the world. At the same time, it would be difficult to deny that many types of safety risks co-exist in everyones daily lives, and within tourism as well. However, an important difference exists: People are rarely in a position to change their place of living, but nothing can force them to spend a holiday in a place that they perceive as insecure. (Kaynama and Black, 2000)The basic requirement of contemporary demand is higher quality supply and services, and that quality has become the most important factor in the existing climate and development of that demand. But usually do not mention factors which are the condition sine qua non—peace, safety, and security, now generally taken for granted. Any threats to the safety of tourists causes a decrease or total absence of activity, not only in a particular destination, but also very often in neighbouring regions or countries as well. Consequently, since tourism is an important contributor to national economies, host countries will find it necessary to take substantial measures to bring the country hit by crisis back onto the market as quickly as possible. Taking the example of three companies discussed below we further try to explore their role and business strategy. (Medlik and Wang, 2002) Kuoni, Holiday Company Kuoni began looking farther afield in the 1960s. In 1963, the company made its first entry into the Asian markets with the opening of a branch office in Japan. (Medlik and Wang, 2002 )Two years later, Kuoni entered what was later to become one of its most important single markets when it acquired the United Kingdoms Challis Benson Ltd. The importance of the U.K. market to Kuoni was seen at the beginning of the 1970s when the company changed its nameand its U.K. operations nameto Kuoni Travel Ltd. (Buhalis, 1998) The companys listing on the Swiss stock exchange provided fuel for new growth, while opening up the companys shares to new partners, including SwissAir, which built up a 30 percent share in Kuoni. The public listing enabled the company to step up its international growth. After opening a subsidiary in Austria at the beginning of the decade, Kuoni now launched subsidiaries in Germany and Spain, both in 1973, and a subsidiary in Greece the following year. The year 1974 also saw Kuoni step up its position in the U.K. market, when it acquired Houlders World Holidays, based in England. (Buhalis, 1998) While building up its international network, Kuoni also was launching new products. In 1977, the company began marketing its first around-the-world tour. In the 1980s, Kuoni began to acquire properties in many of its most popular destinations, adding a number of hotels, including the Hawksbill Beach Hotel in Antigua in 1981 and the Discovery Bay Beach Hotel in Barbados, bought in 1984. In 1986, Kuoni became the first tour operator to offer around-the-world charter flights on the Concorde supersonic jet. (Morrison, 1996)Although this latter product catered to the companys strong high-end and high-margin clientele, Kuoni also launched a new brand name, Helvetica, to encompass its discount tour and travel operations. The worldwide travel industry remained highly fragmented in the 1990s, with numerous small-scale operators competing against a smaller number of quickly growing industry heavyweights. Kuoni, which had already captured the lead in the Swiss market, was determined to maintain a leadership position as the travel industry headed into a drawn-out consolidation drive leading up to the turn of the century. The company acquired Reiseburo NUR Neckermann in 1987, boosting its position in the Austrian market. Three years later, the company regrouped its Austrian activities, launching the NUR Neckermann Reisen AG joint venture with Germanys Neckermann Touristic. Kuonis part of the joint venture remained at 49 percent. (Morrison, 1996) Back home, the company continued to consolidate its dominance of the Swiss market, acquiring Privat Safaris, the countrys leading operator of tours to eastern Africa, and Reiseburo Popularis, which combined retail offices with direct sales operations marketing discount tour and travel packages. Yet Kuonis strong position in the Swiss market and its growing share internationally soon led it to become the target of a takeover attempt. The sale of SwissAirs 30 percent holding created the opening for Germanys Krauthof AG department store group to acquire a 50.1 percent majority of Kuoni in 1992. (Middleton, Clarke, 2001) Kuoni, through the Kuoni and Hugentobler Foundation, nonetheless retained majority control of the companys voting rightswhich provided the leverage to the resolution of the takeover attempt. In 1995, the Kuoni and Hugentobler Foundation bought out Krauthofs stake in the company. The company then changed its name to Kuoni Travel Holding, a move that also reflected a new diversification drive: in 1995 the company acquired Danzas Reisen AG, a Switzerland-based specialist in business travel services. The Danzas acquisition led Kuoni to create a dedicated business travel unit. The company also acquired retailer Kewi Reisen, while integrating its majority share of Railtour Suiss SA, acquired the year before. With its independence assured, Kuoni launched its own acquisition drive in the late 1990s. In 1996, Kuoni added Frances Voice SA, and Scanditours, focused on the Nordic region. (Middleton, Clarke, 2001)The company moved into The Netherlands with the acquisition of Special Traffic that same year. Kuoni also looked to the potentially huge market of India for the first time, acquiring SOTC Holiday Tours, which provided the basis for its Kuoni India Ltd. subsidiary. Two other acquisitions completed the companys busy years, those of Rotunda Tours, expanding Kuoni into South Africa, and CIS Intersport, a Swiss company catering to the growing demand for sports-oriented holiday packages. In 1996, also, the companys Edelweiss Air launched its charter flight operations. (Walle, 1996) Kuonis expansion campaign continued strongly through the end of the century, including the launch of the P O Travel Ltd. joint venture with Peninsular and Oriental Steam Navigation Company, based in Hong Kong, with offices in Bangkok and Singapore. The 1997 joint venture strengthened Kuonis position in the Asian market, which, despite the austere economic climate in the region at the end of the decade, promised to become one of the worlds stronger holiday markets. Closer to home, Kuoni continued lining up acquisitions, especially Voyages Jules Verne, a U.K. upscale tour operator, and Switzerlands Manta Reisen, which specialized in scuba and other deep-sea holidays. The company also acquired German business travel specialist Euro Lloyd Reisenburo, which it combined with its other German operations into the new subsidiary BTI Euro Lloyd, one of that markets top five business travel companies. Also in 1998, Kuoni launched a joint venture with Italys Gastaldi Tours. The next year Kuoni face a major setback. At the beginning of 1999, the company announced its agreement to merge with the United Kingdoms number three travel operator, First Choice Holidays. The merger, agreed to by both sides, was thwarted by a surprise takeover attempt from rival U.K. operator Airtours Plc, which offered a higher per-share price. When the majority of First Choices shareholders chose to back the Airtours offerwhich itself was blocked by the European monopolies commissionKuoni pulled out of the merger talks. The First Choice merger might have allowed Kuoni to become not only a major player in the U.K. travel market but to boost its position to the top ranks in all of Europe. After the collapse of the merger, however, Kuoni redirected its strategy to other markets. Three markets in particular were to receive its attention: the United States, Scandinavia, and India. In 1999, Kuoni acquired upscale travel company Intrav, based in St. Louis, Missouri; the Intrav acquisition, which cost Kuoni $115 million, gave it a strong opening into the booming U.S. market for luxury vacations. The following year, the company acquired T Pro, an incoming services specialist based in New York and the number three incoming services provider to the U.S. market. The year 2000 saw Kuoni not only strengthen its hold on the Swiss travel markettaking a 49 percent share in ITV, Switzerlands third largest tour group and subsidiary of Germanys Preussagbut also expand its presence in its new target markets of Scandinavia and India. The first was served by the acquisition of 49 percent of Apollo Resor, based in Stockholm, Sweden, and then boosted by the acquisition of Denmarks Dane Tours. In March 2001, the company announced its decision to restructure most of its Scandinavian holdings into a single subsidiary. Thomas Cook Holiday Company Thomascook.com has pledged to bring in a quarter of sales through its website in 2006 and appointed a new digital agency to plan and buy all online media.The move will include an increase in online advertising spend of around 50% and will see an integration between traditional campaigns in print and outdoor with online marketing. Harvest Digital will take on all online media planning and buying through existing travel portals, plus drive a new strategy with the likes of Metro.co.uk, GM.TV and the Lonely Planet websites.Head of online marketing at Thomas Cook, Manuel Mascarenhas, said: â€Å"We selected Harvest Digital because they have delivered on an imaginative plan, using competitions, contextual advertising and sponsorships against tight CPA targets. They have a core audience of repeat bookers and want to ensure we continue to acquire new customers online. The new marketing strategy will target what has been labelled the lucrative and web-savvy audience of 35 to 45 year olds that several holidays a year, including packages, flights, ski holidays and cruises. Harvest Digital partner Emma Wilson added that Thomas Cook is the oldest name in travel but has a very contemporary approach within its sales channels. Also Thomas Cook Signature has won the award for Best Long Haul Operator at last years British Travel Awards, receiving 31% of the vote, while in 2002 Thomas Cook India Ltd has been awarded the Institute of Directors prestigious Golden Peacock National Award for excellence in corporate governance, awarded for transparency, excellence in conducting business at various levels of management, social and environmental responsibility, ethical business practice and consistent creation of value for all the stake holders. Thomas Cook Group has acquired Elegant Resorts, the Chester-based luxury travel firm with 160 staff and gross assets of  £22m. Thomas Cook acquired Hotels4U.com from Centurion Holiday Group for an initial  £22m. This company closed 150 travel shops and six offices throughout the country with the loss of up to 2,800 jobs, affecting sites in Rochdale, Manchester, Rawtenstall and Denton; not only this but Thomas Cook based 40 head office jobs in London following its merger with Mytravel, but this is not expected to affect the jobs at its existing headquarters in Peterborough. Apart from this, Thomas Cook of Peterborough merged with MyTravel of Rochdale to form a combined holidays business with more than 32,000 staff, Thomas Cook is to conduct a strategic review of its UK tour operating business, prompting speculation that it will seek buyers for Club 18-30, Style villa holidays, Neilson skiing and Sun World. Accenture has won a  £110m 10-year contract from Thomas Cook to set up an IT and finance service centre, which will involve the transfer of about 400 Thomas Cook staff. Thomas Cook has launched a branded digital TV channel, which features its full range of holidays and other travel products; also reduced costs in its European travel business by shedding 2,600 jobs, closing 100 shops and grounding four aircraft. Today, Thomas Cook is a leading travel company and one of the most widely recognised and respected brands in the world. Employing over 11,000 staff, Thomas Cook operates throughout a network of 616 locations in the UK and overseas. The company is wholly owned by Thomas Cook AG (formerly CN Touristic AG), which announced its acquisition of Thomas Cook in December 2004 and was granted EC approval in March 2005. (Marvell, 2005) Thomas Cook AG is now the second largest travel group in Europe and the third largest in the world. One reason for the companys longevity and continued success is its commitment to providing exceptional service. Thomas Cook once described himself as the willing and devoted servant of the travelling public. Today, 160 years after his pioneering excursion, these words remain a fitting epithet to the company he founded. (Bloch and Segev, 1997) Thomas Cook, a major UK Tour Operator, has signed an agreement to pilot AXS-Ones new AXSPoint(R) electronic invoice delivery service to travel agents. The new AXSPoint service, which has been approved by the Civil Aviation Authority (CAA), a UK regulatory body for use by tour operators holding an Air Travel Organisers Licence (ATOL), will eliminate the need for tour operators to issue hard copy invoices to travel agents, thereby providing tour operators such as Thomas Cook Holidays with potential savings of up to 80 percent on their annual invoice distribution costs. For travel agents involved in the Pilot program, invoices will now arrive electronically on the same day as dispatch. The AXSPoint service will offer travel agents the ability to automatically match and reconcile invoices to bookings, thereby reducing administration costs and allowing quicker turn-around of invoices to the agents customer. (Richer and James, 1998) The AXSPoint service will significantly enhance the service we provide to our travel agent customers and the service they provide their customers in turn, commented Manny Fontenla Novoa, Chief Executive Officer, Thomas Cook (UK). The speed and efficiency of electronic distribution will reduce our costs considerably while benefiting agents and customers alike. Commenting on the development, Mark Donkersley, Managing Director, AXS-One UK, said: While Thomas Cook is the first tour operator to pilot this system, we are receiving strong interest from other tour operators and travel agents. The issuing of paper invoices has been expensive to tour operators and agents alike in terms of money, time and customer service. Today, this activity costs the regulated tour industry over $25 million per year and we are currently working with the leaders of this sector to bring them on board our system. By providing these services electronically, and securely, we save them a considerable amount of money, while at the same time adding value to each part of the distribution chain and generating recurring revenue streams for AXS-One. (Richer and James, 1998) Superficially, the differences between Thomas Cook AG and other agencies are evident, as one is a national tour operator, while the others are global travel conglomerates. Nevertheless, if we examine deeper below the surface and truly analyze other companies, we can appreciate the great difference between Cook and others’ services. All the agencies have become trusted and highly respected in their markets, as well as being among the best-known names in them, but Cook’s services is most appreciated by his customers. This is the reasons his company is the most preferred one. Thus, we can infer that Cook has the same presence and effect in his comparative market, it being tour operation in the U.S. for other companies and the world for Thomas Cook AG. (Trochim, 2001) STA Travel Company To be responsive to their globally dispersed and culturally diverse customer base STA Travel sought to â€Å"delegate as much autonomy, responsibility and authority as close to the action as possible,† while using a single integrated information system â€Å"to provide global support and solutions when that can improve their experience.† They described this philosophy, ‘as local as possible, as global as necessary’. An evolving business strategy called One Company sought to â€Å"align business operations with customer needs across the world†. Global teams were charged with developing and delivering â€Å"a single supplier strategy, one service standard, one set of operating standards and guidelines for management of our corporate identity†. To support that model the company was providing BLUEe, â€Å"a single sales and booking system to every STA Travel point of purchase backed by a single network, infrastructure, finance, and reporting syst em.† (Trochim, 2001) To ensure they remained â€Å"as local as possible,† each major country maintained its own sales and marketing arms. While most country’s home web page was consistent in look and feel, country marketers were each free to design their marketing campaigns including methods to harness the internet. The US office, for instance had run a successful viral marketing campaign called â€Å"body shots,† intended to promote spring break in the U.S. They had also initiated advertising on Facebook and Myspace, two sites popular with the demographics desirable by the firm. The STA Travel U.S. website, itself was a popular destination, registering some 600,000 unique visitors each month. Over 400,000 customers and prospective customers also contact the U.S. Division each month by email. The STA Travel’s North American division’s had initiated development of STATRAVEL193.COM, a highly interactive web site featuring video reports from STA customers about travel destinations. (Gall Borg, 2003)They had also been the first division to explore the possibilities of Second Life as a marketing tool. The idea had received a welcome endorsement, and a matching investment, from STA Travels headquarters in the U.K. Craig Hepburn, STA Travels Global Webmaster, was responsible for the content management system that fed the various country websites and that was being rolled out throughout the world. His team had also supported development of personalized travel blogs, that allowed STA Travel customers to document their travel. Hepburn was enthusiastic about SL as a marketing channel, but knew it would be met with resistance by the marketing departments in other countries. The initial strategy STA Travel had conceived for their web presence had two prongs. The first element was to create several destination islands to attract prospective travelers. For instance, one idea was to create an island featuring the great wall of China. The second element of the plan was to hold a machinima competition among current Second Life residents. Machinima, a style of movie making, uses avatars as members of the cast; the movie is then filmed in the context of a virtual wor

Problems in American Education

The American system of education has often been criticized in many circles. By objective measures, such as standardized test scores, the United States lags behind other industrialized nations in scores on subjects such as math and science. The most recent comparisons have the United States ranked sixteenth in a field of the thirty wealthiest nations in science. (Glod, A07) They ranked twenty-third in the same field with respect to math scores. (Glod, A07) The regions with which these students were compared were, for the most part in Western Europe and East Asia.(Glod, A07) The popular American culture makes light of how uneducated the general population is. Shows like the Late Show with Jay Leno take to the streets and ask people relatively simple questions, which they cannot answer. Game shows such as â€Å"Are you Smarter than A Fifth Grader† make light of adult ignorance, and news organizations emphasize the problems in America’s schools. A close examination of the m otives, methods and goals of public education in the United States along with a review of public attitudes toward learning shed light upon some of the reasons for the substandard reputation of America’s schools.It can be argued that in terms of economic benefits, our schools are adequately successful, but in terms of a social and cultural tool, American schools fall well short of their foreign counterparts, as well as their own stated goals. (Rebell, 37)The reasons for this are lack of proper funding, the treatment of teachers, and the localized control of schools attempting to achieve unrealistic Federal mandates. Schools in America across the board are under-funded. Many studies have demonstrated that the quality of education is greatly enhanced by low teacher-to-student ratios.The National Education Agency recommends a ratio of no more than 15 students per teacher in Elementary schools. (Roza, Miller & Hill) Across the nation, the average class size for elementary school i s 22-25 students per teacher. (Roza, Miller & Hill) Given numerous studies that prove that the smaller ratio yields real, tangible improvements in math and science scores, it is clear that more qualified teachers and more facilities wherein they might teach are needed. (Roza, Miller & Hill) These assets, however, cost money.(Roza, Miller & Hill) The states and localities are expected to find money for schools, and the method of choice for funding schools has been the property tax. (Roza, Miller & Hill) Coupled with the fact that schools generally serve the neighborhoods in which they are located, and the endemic problem becomes clear: Schools from poorer neighborhoods will have less money because property values are lower. (Roza, Miller & Hill) Both the States and the Federal government have attempted, with limited success to solve these inadequacies.(Roza, Miller & Hill) The federal government, through the Title I program, has allocated $18 billion to â€Å"fill the economic holes † in funding for impoverished districts, but these programs have failed, as the money is often either diverted, or never moved owing to loopholes in the existing laws. (Roza, Miller & Hill) Federal studies have shown that school districts generally favor financially those schools who have the fewest challenges, and that Title I money is frequently funneled to schools with little or no financial need.(Roza, Miller & Hill) Teacher pay is another area in which the lack of funds has hurt educational outcomes in America. Thirty-six states have a funding gap, with a nationwide dispar ¬ity between high-poverty and low-poverty districts of $1,348 per student. Funding gaps and the lack of progress in eliminating them continue to contribute to the overall lack of relative success in America’s public Schools. (Carey, K. ) In twenty-five of a forty-nine state study, the highest-poverty school districts get fewer re ¬sources than the lowest-poverty districts. (Carey, K. ) Even m ore states have a gap for high-minority districts, thirty-one in all.Those thirty-one states educate six out of every ten poor and minority children in America. The shortfalls, some exceeding $1,000 or even $2,000 per student, are greatly at odds with national goals for closing the achieve ¬ment gap. (Carey, K. ) They fly in the face of any reasonable, rational notion of how to support our public schools. (Carey, K. ) Until state policymakers get serious about fixing these problems, they can ¬not in good conscience pretend to have fulfilled their basic obligations to those students who are most in need of a high-quality public education. (Carey, K.) Moreover, these numbers ac ¬tually understate the true extent of the problem because they don’t reflect the added cost of educating children in poverty. (Carey, K. ) School funding experts gener ¬ally agree that high-poverty schools need more resources to meet the same standards. (Carey, K. ) School funding comparisons tha t reflect this fact have been a mainstay of academic research and various technical analyses of school finance for a number of years. (Carey, K. ) Recent examples of such analyses include publi ¬cations from both the U. S. Department of Education and the U. S. Government Ac ¬countability Office.(Carey, K. ) The average teacher salary in the United States is between $39 and $43 thousand dollars a year, depending on location. (Average Salaries)It typically takes a four-year degree and additional study of content to qualify to be a teacher. (Porter, C) In contrast, other professionals with four-year degrees earn over twice that amount, particularly if their area of study is math or science –related. (Cowan, K. ) It shouldn’t be surprising, then, that qualified math and science teachers are in high demand. The money necessary to lure these types of people into education simply does not exist in the current budgets.Critics of this analysis argue that substantial raises in teacher pay would be â€Å"throwing money† at the problem, and over-compensating a population of underperforming teachers. (Porter, C) This argument is precious. The current population of teachers do not represent the best available, largely because of low salary; as better quality educators become available, the job market will become competitive, and with a very short time, the overall quality of those teachers would rise to the level appropriate to the pay. Related to the low salaries of the teachers are the cultural attitudes that America has toward schools, teachers and education.It is these attitudes that contribute to the problems that Educators in this country face when trying to compete with other nations. (Porter, C) Americans have long been used to the notion that a â€Å"free and appropriate† education for their children was a fundamental right. (Porter, C) As a result, many schools have devolved into nothing more than quasi-educational daycares for all American children. (Porter, C) The fact that American parents express more satisfaction with the schools than do their European and Asian counterparts illustrates the US cultural complacency with respect to education.(Porter, C) Students in these foreign schools work harder for a number of reasons. First, they are under more parental scrutiny, second, their cultures do not denigrate learning and academic achievement, and third, admission to favorable careers and higher education is based on close assessment of learning achievement in high school. (Bishop, J. ) In contrast, students in US schools do not recognize the benefits of education for a number of reasons. (Bishop, J. ) First, the U. S. labor market does not reward high school achievement. (Bishop, J.) Statistics indicate that for the first eight years after high school, achievement does not correlate to increase in wages for the high school educated. (Bishop, J. ) Most employers do not look deeply at grades of high school gra duates, and many schools do not send transcripts to prospective employers, even when requested to do so. (Bishop, J. ) Another key contributing factor to the lower expectations of benefit for American students in high school is the fact that college admissions are not based on high school performance as much as on aptitude tests. (Bishop, J.) The result is that neither students nor parents are motivated to push for higher academic standards, since they would jeopardize GPA, SAT scores and class rank, the three key statistics examined for university admission (Bishop, J. ). The fact that parents and students to not regard the field of education as important in its own right is caused by several factors. The first is the sense of entitlement that parents have about education. (Bishop, J. ) They feel that students have a â€Å"right† not to learn, but to get a Diploma, go to college, and achieve the financial success associated with college education.(Porter, C. ) Parents and st udents across the board assume that this is an entitlement, rather than something to be earned through effort and ability. (Porter, C. ) The basic notion is that education is something â€Å"done to† a child, rather than something the child â€Å"does†. (Porter, C. ) This attitude, shared by parents, students and even some administrators dovetails into the lack of respect for educators that is reflected by poor pay. In no other profession, are professionals questioned, criticized and scrutinized by their clients than in education. (Porter, C.) Despite teachers having obtained a four-year degree, additional training for teaching, and how ever many years of experience they might have, their clients (parents) are still convinced that they know more than the professionals as to how their student might learn. (Porter, C. ) The notion that â€Å"those who can’t do, teach† and the underlying notion that teachers have that job because they cannot do anything else contributes to this lack of professional respect. (Porter, C. ) Low salary validates this viewpoint. The underlying assumption is that if a teacher were competent, they would be doing something else that yields better pay.Often, this attitude is displayed by school administrators, who often treat teachers as fungible units of work, with little or no consideration for their abilities, expertise, experience or suggestions. (Porter, C. ) The fact that administrators are often acting according to governmental or budgetary guidelines does not detract from the perception created by their conduct. (Porter, C. ) In European cultures, as well as many Asian ones, the opposite assumption is held. Parents expect very high output from not only teachers, but students as well. (Bishop, J.) The question is not â€Å"can you teach my child,† but rather, â€Å"can my child learn from you what he or she needs†. (Bishop, J. ) While salaries for European or Asian teachers may not be as hi gh comparatively, the level of respect afforded to the profession is much higher. (Bishop, J. ) This begins with students believing and understanding that education is their responsibility, not that of their teachers. (Bishop, J. ) This causes the students to put in maximum effort to learn, which in turn solves a vast majority of the problems experienced in the American system. (Bishop, J.) A teacher who is unable to perform in an environment of students who are highly motivated to learn is not competent, and would need to be retrained or replaced. (Bishop, J. ) The recognition of the real value of education by the public makes the raising of funds to pay for quality teachers and facilities much easier as well. Since all of the community and the government recognize the economic need for quality education, it is given budgetary priority. (Bishop, J. ) Despite these deficiencies, the political will to spend the money needed to improve schools is not present.When a study is done which ranks US education as below international standards, there is often an outcry, and much talk about improvement, but very little actually happens. The Federal government has issued edicts such as â€Å"No Child Left Behind† which articulates goals without a roadmap or funding to achieve them. (Neill, M. ) This mandate has contributed significantly to the inability of schools to meet their educational goals. It is taken as a given, even by proponents of the â€Å"No Child Left Behind† program that it is under funded, but that is just the tip of the iceberg in terms of this issue.(Neill, M. ) The federal government has, in this law, issued what is known as an â€Å"unfunded mandate† by insisting the States meet certain standards without providing the means to do so(Neill, M. ). This is merely one of numerous problems with the â€Å"No Child Left Behind† concept. (Neill, M. ) Modeling the concept after an initiative in Houston, the â€Å"No Child Left Behin d† program has been unable to reproduce that success in other places. (Neill, M. ) Studies of the Houston plan show that the success illustrated there was never really present to begin with (Neill, M. ).Results were manipulated by excluding non-performing students from counts, and even with that provision, the race-gap was not addressed in Houston. (Neill, M. ) By dividing student groups up by race and other demographics, studies have also shown that the more diverse the culture of a school district, the less likely they are to meet the â€Å"No Child Left Behind† standards of achievement. (Neill, M. ) In fact, some studies have shown that given current demographic shifts, virtually all schools will eventually fall short of the improvement standards set by the initiative. (Neill, M.) Since the sole measure in the â€Å"No Child Left Behind† initiative is standardized tests, the entire focus of education has become test preparation. (Neill, M. ) This narrows curri culum, and puts undue pressure on students, teachers and administrators. (Neill, M. ) It also forces curriculum away from higher level thinking skills which are far more useful assets for future academic, financial and social success. (Neill, M. ) â€Å"No Child Left Behind† demands that English-language-impaired and special-needs students meet proficiency standards without any means of making this happen.(Neill, M. ) The theory is that the mere institution of the requirement, coupled with the threat of punishment for failure, will force the schools to improve in this area. (Neill, M. ) By privatizing tutoring and support funding, â€Å"No Child Left Behind† not only takes money away from public schools, but also promotes the perception that failures of student performance are based on incompetent or lazy teaching, rather than anything associated with student efforts, or any other factor. (Neill, M.) â€Å"No Child Left Behind† labels certain schools as failures , which causes the quality teachers within such schools to transfer out, and creates a difficult climate for the schools to recruit quality teachers. (Neill, M. ) The initiative in no way addresses socio-economic causes of academic struggles, making no effort to feed, clothe or house underachieving students in order to make them able to focus on academics. (Neill, M. ) Finally, the remedies offered by â€Å"No Child Left Behind† have failed to â€Å"fix† schools which prove to be â€Å"in need of improvement† according to their own standards.(Neill, M. ) In fact, the initiative actively prevents measures which have proven to offer improvement for schools with poor performance records. (Neill, M. ) Portfolio assessment, teacher training, proactive parent involvement, and other proven methods of improvement are shoved aside in favor of artificial standards based on tests that fail to address the actual goals of education, and whose contents are ridiculously unrepr esentative of competent content. (Neill, M. )Lack of proper funding, the treatment of teachers, and the localized control of schools attempting to achieve unrealistic Federal mandates have caused United States Schools to under perform in comparison to their European and Asian counterparts. The culture of contempt for education professionals and disengaged parents have created a system which is deeply flawed. Resolution of these problems would involve wholesale restructuring, massive rebuilding and huge amounts of money.Given the continued economic strength of the United States despite perennial failures in education, it is likely that the government will allow the â€Å"top ten percent† to gain benefits from public education, while everyone else, including parents, teachers, administrators and most students are left mired in a tangle of misguided regulation, spurious funding, unrealistic expectations and public contempt for their efforts. Bibliography â€Å"Average Salaries of Public School Teachers† The National Education Agency Website 2004-5 The National Education Agency 2002. http://www. nea. org/edstats/RankFull06b.htm Bishop, J. â€Å"Incentives for Learning: Why American High School Students Compare so Poorly to Their Counterparts Overseas† Center for Advanced Human Resource Studies (CAHRS) CAHRS Working Paper Series 1989. Accessed November 14, 2008. http://digitalcommons. ilr. cornell. edu/cgi/viewcontent. cgi? article=1399&context=cahrswp Carey, C. â€Å"The Funding Gap 2004: Many States Still Shortchange Low-Income and Minority Students† The Education Trust Website 2004. The Education Trust. 2007. http://www2. edtrust. org/NR/rdonlyres/30B3C1B3-3DA6-4809-AFB9-2DAACF11CF88/0/funding2004. pdf Cowan, K.â€Å"List of Best Degrees by Salary† PayScale Website 2008 PayScale, Inc. 2000. http://blogs. payscale. com/salary_report_kris_cowan/2008/07/list-of-best-co. html Glod, M. â€Å"U. S. Teens Trail Peers Around World on Math-Science Test† The Washington Post Wednesday, December 5, 2007; Page A07 http://www. washingtonpost. com/wp-dyn/content/article/2007/12/04/AR2007120400730. html Neill, M. â€Å"No Child Left Behind†Ã¢â‚¬ ¦ After Two Years: A Track Record Of Failure† Time Out from Testing Website. 2008 Performance Assessment 2001 http://www. timeoutfromtesting. org/pr/PR_Neil_NoChildLeftBehind.pdf Porter, C. Interview (personal) 12 November, 2008. Rebell, M. â€Å"Professional Rigor, Public Engagement and Judicial Review: A Proposal for Enhancing the Validity of Education Adequacy Studies. † Teacher College Record Volume 109, Number 6, 2007 Pg. 1-73. http://www. schoolfunding. info/resource_center/research/professional_rigor. pdf Roza, M, Miller L. & Hill, P. â€Å"Strengthening Title 1 to Help High-Poverty Schools† The University of Washington website 2005 The university of Washington,2008 http://uwnews. org/relatedcontent/2005/August/rc_parentID11695_thisID11712 . pdf

World War II Was The Deadliest Conflict Of Japanese...

World War II was the deadliest conflict in human history, lasting from 1939-1945. One of the initiators, Japan, was behaving aggressively and pushed the United States away from the country’s attempt to stay neutral regarding global issues. Japan’s belligerent conquests were the ignition to the fuel of hostility against the Japanese-Americans that has been increasing for many years. Americans sought a solution to fix the Japanese issue after its brutal attack against the United States, but failed to distinguish between domestic and global issues. The United States decided to intern all Japanese citizens on the west coast. Families were given notice, told to move to evacuation centers, and then to predetermined military zones. Although the†¦show more content†¦Instead, the United States adopted the policy of non-recognition. This policy became known as the Stimson Doctrine. The United States would not interfere in the interest of neutrality and to focus on its ow n domestic affairs; during the 1930’s, Great Depression, a time of recession, was a more pressing matter for the United States. Due to the United States and League of Nation’s lack of action, the Japanese were encouraged to pursue their conquest of Asia. In 1937, Japan attacked Chinese troops on their frontier. This fight evolved into the Second-Sino Japanese War. The United States was still adamant about maintaining its neutrality. To avoid confrontation, the biggest action the United States took was evacuating its citizens from China. However, the U.S. gunboat Panay, a boat assisting in the evacuation, was sunk by Japanese aircraft. Although Japan apologized, they continued to be aggressive. They U.S. eventually to preventative action when the terminated the Treaty of Commerce and Navigation of 1911. In addition, strict restrictions were placed upon the Japanese as well as greater sanctions. The Japanese could not purchase combat related material such as gasoline and high grade oil. The U.S. also closed the Panama Canal to Japanese vessels and froze Japanese assets in the United States. Negotiations with Japan were growing intense, proposal were being made and summarily rejected. One of the last proposals made by the United States was the Ten

Final Exam Essay Questions - 1808 Words

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