First Steps

Do you have the right attitude, skills and resources to work in tourism? If you are intending to enter into a tourism business you need to consider your suitability for this type of business. This section asks questions that will help you determine your suitability, provides resource guides detailing key points to remember when starting a business, and describes the tourism industry’s structure and networks.

Is Tourism for Me?

A large percentage of tourism businesses in Tasmania are small businesses offering a range of services to visitors, often 24 hours a day, seven days a week. Tourism is a seasonal industry and careful planning is required to survive. The personal demands of running a tourism business are all too often overlooked.

Tourism is a highly dynamic and broad global industry that is of vital importance to the Tasmanian economy. It directly contributes $900 million – approximately six per cent of Gross State Product. It comprises approximately 2,400 separate businesses and supports around 17,000 direct jobs – just over eight per cent of Tasmania’s workforce.

Everyone gains from properly developed and managed tourism. The benefits can be especially significant in regional areas, diversifying the economic base and expanding the employment market. Your business success or otherwise will also impact on other tourism operations as visitors make their decisions and subsequent recommendations about their experiences with you.

Before embarking on a tourism venture you must consider both your personal attributes and your professional skills and experience.

Have I got the right personality for tourism?

Tourism is a people industry. To succeed you must genuinely like people and be interested in what they think and desire. You have to respect the customer as a person, giving each visitor a warm welcome, regardless of their personality and how long they stay.

Personal Attributes:

1. Do you like working with people?
2. Do you communicate well with people?
3. Are you an independent person?
4. Do you have confidence in your own abilities?
5. Are you prepared to embrace self-employment as a lifestyle and philosophy rather than just a job?
6. Are you a good planner and organiser?
7. Do you feel you can make a decision, solve disagreements and lead people in a work situation?
8. Can you look creatively at problems to identify a number of solutions?
9. Do you have a good level of health and fitness?

Knowledge, skills and resources needed

A personality suited to tourism must be matched by a range of skills, knowledge and resources that will give your business the best chance of long-term survival. Below are some measures you will need to take in the course of setting up and running your business, and a list of issues you will need to consider. Further information on some of the actions listed is provided later in StartPoint.

Feasibility Assessment

1. Determine a market for your business.
2. Identify sources of information.
3. Prepare basic operating/revenue projections.
4. Acquire knowledge of industry rules of thumb (e.g. cost of food and beverages as a percentage of revenue).

Financing

1. Prepare a financial proposal for a potential investor.
2. Structure the optimum financing package. (How much debt is too much? Is leasing viable? etc.)
3. Determine which institutions you will approach for tourism finance.

Product Design/Location

1. Design and position your product to meet the needs of your target market.
2. Differentiate your product in the market.

Business Planning

1. Prepare a business plan.
2. Set goals.
3. Plan review frequency.
4. Allocate budgets.

Marketing & Distribution

1. Prepare a marketing plan and pricing/commissions strategy.
2. Determine your target audience.
3. Locate the most effective marketing media for your product.
4. Identify your most effective distribution channels.

Recruitment/Training

1. Identify staffing requirements.
2. Decide under what conditions staff will be employed (e.g. is enterprise bargaining appropriate?).
3. Consider team motivation, business management training and small business training courses.

Management

1. Decide whether you will manage the business yourself or appoint a manager.
2. Ensure the manager can demonstrate appropriate experience and knowledge to potential investors.
3. Ensure you or your manager are familiar with appropriate accounting practices and taxation requirements.

Industry Structure

1. Determine the best distribution channels for your product.
2. Ensure your business does belong in tourism sectors.
3. Form business alliances and join industry associations.

Consumer Behaviour

1. Undertake market research to identify your customers and find out as much as you can about their travel patterns.
2. Review tourism forecasts.