Hospitality Marketing In Cyprus

1 Executive Summary 2

2 Introduction 3

3 Rationale behind the choice of the country 3

3.1 GDP 3

3.2 Disposable Income 4

3.3 Leisure Expenditure 5

4 Analysis of country's external environment (Industry Issues) 6

4.1 Political and Legislative Environment 6

4.2 Terrorism and security 6

4.3 Positive growth factors 7

4.4 Negative growth factors 8

4.5 Market Opportunities 9

5 Choice of the entry mode 10

6 Product Marketing 11

6.1 Product 11

6.2 Price 11

6.3 Promotion 12

6.4 Place 12

7 References 13

1 Executive Summary

The present report focuses on the expansion of a sport complex to Australia. It analyses the benefits that the country offers to a foreign investment due to its post- Olympics era and good economic conditions. We see that leisure expenditure is quite good and only a few negative factors may affect the investment.

Analyzing the positive and negative growth factors of the tourism industry in Australia, it becomes apparent that there are many opportunities for new ventures from abroad.

Flowingly, we analyze various approaches on the entry mode of an organization in a foreign market. We explore the literature and finalize the results accordingly to our approach.

Lastly, we propose a product mix for the complex to be created in Australia.

2 Introduction

The Australian economy remained strong throughout the last period, despite external influences like the Bali bombing in 2002 and the war in Iraq in 2003. However, there was continuing uncertainty caused by terrorism scares, the SARS epidemic and a generally weak world economy adversely affecting the tourism market (Johanson, J. and Valhne, J.-E., 1992).

There were also a number of positive factors that did much to offset the negative influences of the world market (Johanson, J. and Wiedersheim-Paul, F., 1975). These included the hosting of the Olympic Games in 2000 and the Rugby World Cup in 2003, both events provided a much needed boost to the economy and the tourism trade in general during an otherwise difficult period. According to the Australian Bureau of Statistics the Olympic Games generated A$1.4 billion in expenditure by foreigners alone during the September quarter.

3 Rationale behind the choice of the country

3.1 GDP

Internal factors boosting GDP growth and maintaining the health of the Australian economy included low interest rates, which encouraged spending and home ownership (Agarwal, S. and Ramaswami, S.R., 1992), which in turn boosted the building trade. High levels of employment and low levels of inflation served to increase disposable incomes and spending among the population at large (Powley, C., 1993).

Tourism's contribution to GDP declined after the Olympics in 2000, further hit by the collapse of Ansett Airlines. The "September 11" terrorist attacks had a sharp negative impact on both domestic and international tourism. Tourism was further affected during 2002 by the war in Afghanistan, the Bali bombings, a drought throughout the country and the SARS scare. All of which served to discourage travel in the region.

GDP continued to grow in 2004, with the incumbent Prime Minister again winning the general election with his campaign run on the back of the booming economy and the promise of continued growth following the signing of a Free Trade Agreement with the US. However, growth was slower than in previous years as no major sporting events were held in Australia in 2004 to bring in additional expenditure from abroad, as had occurred in previous years to boost economic growth.

Table 1 GDP 1999-2004

________________________________________

A$ million

Current 1999-2004 % growth

1999 605,841.0 -

2000 650,324.0 7.3

2001 692,666.0 6.5

2002 734,258.0 6.0

2003 778,762.0 6.1

2004 806,019.0 3.5

________________________________________

Source: National statistical offices

3.2 Disposable Income

There is a strong correlation between growth in disposable income and increases in holiday taking (Buckley, P.J. and Casson, M., 1976) among Australians, as increased levels of disposable income allow consumers to spend more on luxury items (Jones, M., Wheeler, C. and Young, S., 1992), such as holidays, which would otherwise be unaffordable.

Disposable incomes rose strongly for much of the review period as the strong Australian economy resulted in high levels of employment, low interest rates and low levels of inflation, making more money available for discretionary spending. Growth spiked in 2003, as the economy boomed, but growth in 2004 was more muted due to the uncertainty caused by the general election, with the fear that if Labour came into power it would raise interest rates and disposable incomes would fall as a result. The Conservatives won the election once again, but the impact was slow to be felt, with below-average growth in disposable incomes over the year as a whole.

Table 2 Disposable Income 1999-2004

________________________________________

A$ million

Current 1999-2004 % growth

1999 326,922.4 -

2000 346,905.1 6.1

2001 370,046.8 6.7

2002 387,910.6 4.8

2003 423,225.5 9.1

2004 428,157.0 1.2

...