Tourism Industry in Amsterdam

Executive Summary The tourism industry in Amsterdam has become important for the economic development of the city. It attracts millions of people who may have different lifestyles, interests, and values. It is characterized by extreme competitiveness among businesses.Advertising We will write a custom report sample on Tourism Industry in Amsterdam specifically for you for only $16.05 $11/page Learn More The growth of this economic sector can be attributed to the cultural heritage of Amsterdam and entertainment opportunities that it can offer. This area of economy is still open to new entrants. Introduction This report is aimed at examining the peculiarities of tourism industry in Amsterdam. In particular, it is necessary to focus on the way in which various external and internal factors can shape it. Much attention should be paid to political, social, economic, technological, and other forces. Moreover, one should concentrate on the competitive environme nt of this industry. In this context, the term tourism industry can include various organizations such as hotels, restaurants, travel agencies, and other businesses. Contemporary Amsterdam attracts people who have different values, priorities, or interests (Dunford 2003, p. 53). This popularity of this city gives rise to the development of a very competitive tourist industry (Statistics Netherlands 2012). These are the main issues that should be examined. Industry Analysis Industry overview and major trends This paper will be focused on hospitality institutions that operate in Amsterdam. Among them, one can distinguish hotels, restaurants, cafes, resorts, and other organizations that provide services to travelers. In the global context, its role is not very important since it constitutes only a small fraction of the national economy. Nevertheless, it does contribute to the development of global economy. For instance, in 2010, the city was visited by 5.3 million tourists (Research an d Statistics Economic Development Department, 2011, p. 1). They brought extra revenues to airlines, and travel agencies that could be located in various countries. Overall, researchers believe that there are positive trends in the development of the Amsterdam tourism industry. In particular, they look at such indicators as the number of tourist arrivals or bed nights1 (Research and Statistics Economic Development Department, 2011, p. 1). Even during the economic recession, these indicators were growing. For example, the number of tourist arrivals grew by more re 10 percent during the period between 2007 and 2009 (Research and Statistics Economic Development Department, 2011, p. 1).Advertising Looking for report on communications media? Let's see if we can help you! Get your first paper with 15% OFF Learn More Therefore, tourism industry in this city is resistant to the effects of global recession. This is one of the main aspects that should be taken into account. The city of Amsterdam and tourism Amsterdam can be viewed as the commercial and technological centers of the Netherlands. According to various rating agencies, this city is one of the most comfortable ones (Hobbes 2009, p. 115). This means that it has necessary infrastructure, educational organizations, recreational facilities that are important for the wellbeing of an individual. Furthermore, the city hosts numerous attractions such as Van Gogh Museum, canals, Hermitage Amsterdam, cannabis coffee shops, and so forth. Therefore, this city can appeal to tourists with different values and attitudes. There are two important effects of globalization on this city. In particular, one can speak about the growing number of in-coming travelers and intensification of trade. Currently, the population of Amsterdam is 802,938 people. In turn, the Amsterdam Area has 11 percent of the national GDP2 (Statistics Netherlands 2012). The economy of Amsterdam as well as the Netherlands is formal. This means that businesses are monitored and regulated. The main consequence of this regulation is that the rights of clients are better protected. These are the main aspects that can be singled out. PESTL Model The external environment of the industry can be examined with the help of PESTL model that can throw light on political, legal, economic, technological and ecological forces. Political and legal environment The government of the Netherlands can be described as a parliamentary democracy and constitutional monarchy. This country does not face any risk of civil conflict or political instability. The strong protection of property and civic rights is the main political and legal factor that will contributes to the growth of hospitality industry (Musterd 2003, p. 88).Advertising We will write a custom report sample on Tourism Industry in Amsterdam specifically for you for only $16.05 $11/page Learn More For instance, it can lead to the increased flow of direct investment into various hotels, restaurants or other hospitality institutions. There are other forces that strengthen the confidence of investors and customers. Among them, one can single out transparency of the legal system and extremely low levels of corruption (Taekema 2011, p. 7). Moreover, economists focus on such an indicator as ease of doing business. Amsterdam is ranked 26th in this rankings (Amen 2013, p. 186). Therefore, the representative of the tourism Industry can find this legal and political environment very attractive Economic forces influencing the tourist industry in Amsterdam The growth in this industry is determined by the increasing globalization and the growing number of travelers. Hospitality institutions can be affected by various economic factors. Much attention should be paid to the purchasing power of clients who come from other European countries and the United States. Therefore, the tourism industry in Amsterdam can be influenced by many other industries . The Netherlands is regarded as a country where entrepreneurs can easily find credit for their businesses. Moreover, the country is an advanced economy with very low inflation rates (Banach 2008, p. 58). One can say that the tourism industry in Amsterdam is very competitive. This is why it is difficult for a single company to gain leadership. They have to provide services with the best ratio of price and quality. Socio-cultural environment and tourism industry in Amsterdam There are several social and cultural forces that can be important for the development of tourism in Amsterdam. Although, Dutch is the only official language, local people can also speak German, English, and French. Therefore, tourists do not find it difficult to communicate with local people. It should be noted that religion does not play a strong role in the social or cultural life of the country. Moreover, the cultural norms adopted in the Netherlands as well as Amsterdam tolerate different forms of religious worship. This issue is also of great importance to leisure travelers. Finally, one should remember that the country has legitimized the use of cannabis, and this policy led to the growth of drug tourism in Amsterdam (Dunford 2003, p. 53).Advertising Looking for report on communications media? Let's see if we can help you! Get your first paper with 15% OFF Learn More Technology and the tourism industry Technology has been critical for the hospitality institutions in Amsterdam because with its help they can better attract clients. For instance, many hotels and restaurants develop their own websites in effort to attract clients from various countries. Amsterdam can also be viewed as a place where technological innovation is encouraged. As a rule, the emphasis is placed on the adoption of technologies which can reduce the pollution of water, air, or soil (McDonald 2011). This issue is particularly relevant if one speaks about transportation. This policy makes the city more appealing to tourists. Overall, Amsterdam has a well-developed infrastructure which includes information technologies, sea transportation, and advanced medical care. Ecological and environmental challenges The main environmental challenge is the increased risk of floods. It affects various types of businesses including hospitality organizations. They have to spend extra costs on flood insurance (Botzen 2013). This environmental challenge can become more important in the future, especially if sea level rises. Competitive environment and Five Forces Analysis The competitive environment of this Industry can be analyzed with the help of 5 Forces Model which helps to examine the internal and external environment of an industry. The threat of new entrants Hospitality institutions that are based in Amsterdam should remember that in this industry the threat of new entrants is high. This situation can be explained by the fact that the capital requirements are lower in comparison with other industries. Furthermore, there are no legal barriers that can prevent other companies from entering this market. The threat of substitute products The threat of substitute products is very low in this industry. Amsterdam offers a unique combination of various cultural sites and entertainment opportunities. Therefore, it is not likely that the tourists can go to a different locatio n. The bargaining power of suppliers In the tourist industry, there are businesses that act as suppliers. One should focus on the role played by travel agencies. These organizations provide information about various hotels in Amsterdam, restaurants, airline companies, and so forth. In other words, they can shape customers’ opinions. Secondly, it is important to speak about the suppliers providing foods and beverages to the hospitality industry. Yet, their bargaining power is not very high because they have to compete with one another. Moreover, hospitality organizations are important for their profitability. The bargaining power of buyers The bargaining power of clients is very strong because they do not have to face any switching costs. They can choose among different hotels, restaurants, airlines, and so forth. Furthermore, the services offered by local hospitality organizations are not very differentiated. This is why buyers can profoundly influence the performance of the tourism industry in Amsterdam. Intensity of competition The tourism sector in Amsterdam is characterized by intense competition. It should be kept in mind that there are many businesses which can offer similar services to clients. This is why they have to improve their services or even lower prices in order to attract customers. This is how they try to differentiate themselves among consumers. Ethical Dimensions The representatives of the tourist industry in Amsterdam have to make sure that their customers are not exposed to any risks. This issue should be considered by the managers of coffee shows where clients can purchase cannabis (Owens 2009). Similarly, Amsterdam is a popular destination for people who are interested in sex tourism. Therefore, the organizations should take precautions to safeguard their privacy and confidentiality. Key findings Overall, the examples provided in this paper can be used to identify the main traits of the tourist industry in Amsterdam. One should f ocus on the following aspects: intense competition among various hospitality organizations; the diversity of cultural sites and entertainment opportunities; the presence of legal safeguards that protect investors and clients; attractiveness to people who may have various values and lifestyles; well-developed infrastructure. Although, this industry is very competitive, it can still offer opportunities for clients and new businesses. This is the main argument that can be put forward. Appendixes Picture One: Tourist arrivals and bed nights (Research and Statistics Economic Development Department, 2011, p. 1) Picture Two: The economic performance of Amsterdam Region (Statistics Netherlands 2012) References Amen, M 2013, Cities and Global Governance: New Sites foar International Relations, Ashgate Publishing, New York. Banach G 2008, Policies in the European Union Unfair for Certain Countries?, The University of Southern Mississippi, Hattiesburg. Botzen, W 2013, Managing Extreme Clim ate Change Risks Through Insurance, Cambridge University Press, Cambridge. Dunford, M 2003, The Rough Guide to Amsterdam, Rough Guides, Boston. Hobbes, J 2009, World Regional Geography, Cengage Learning, New York. Research and Statistics Economic Development Department 2011, City of Amsterdam: Fact Sheet. Web. McDonald, G 2011, Frommer’s Amsterdam Day by Day, John Wiley Sons, Boston. Musterd, S 2003, Amsterdam Human Capital, Amsterdam University Press, Amsterdam. Owens, L 2009, Cracking Under Pressure: Narrating the Decline of the Amsterdam Squatters’ Movement, Amsterdam University Press, Amsterdam. Statistics Netherlands. (2012). Greater Amsterdam economically powerful region. Web. Taekema, S 2011, Understanding Dutch Law, Eleven International Publishing, Amsterdam. Footnotes 1 Please, refer to the Appendixes, Picture 1 2 Appendixes, Picture 2 This report on Tourism Industry in Amsterdam was written and submitted by user L1l1ana to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

McDonald’s restaurants Essay Example

McDonald’s restaurants Essay Example McDonald’s restaurants Essay McDonald’s restaurants Essay In reviewing Subway’s recent economic performance, the restaurant franchise chain is confident in their day to day operation. Subway is still expanding and one day will they will outnumber the amount of McDonald’s restaurants. Subway’s purchasing power is high due to the 33,000 location within 90 different countries. (Subway) Cost Analysis The price for a sandwich from Subway is fairly stable across all 33,000 locations. A person can order the same sandwich form any of these restaurants. So no matter where in the world a person is they can still order their meatball sandwich. Normally a person can order a sandwich, chips, and drink for less than ten dollars. Demand Analysis The demand for fast food has risen throughout the years. McDonald’s is the largest fast-food chain followed by Subway. Subway offers fast-food services with healthier alternatives. As people are short on time to get food, they are also demanding a healthier lifestyle. Subway has answered the call, The Subway ® chain is doing this through a variety of tactics, including the 8 subs with 6 grams of fat or less and other low-fat choices; a family marketing strategy; and an emphasis on unique qualities that make the chain stand out from other fast-food chains. (Subway) Competitor Analysis Subway faces several competitors, anywhere from small mom and pop sandwich shops to other large restaurant chains. Subway’s top three competitors are McDonald’s, Quiznos, and Yum! Brand Inc. Yum! is the largest fast food operator in the world in terms of number of locations, with more than 37,000 outlets in about 110 countries. The company’s flagships chains include KFC, Pizza Hut, Taco Bell, Long John Silver’s, AW Root Beer, with 80% of their restaurants licensed to franchisees. (Yahoo) Action Plan Subway will keep doing what they are doing in order to become the largest sandwich restaurant in the world. With a growth of about 2,000 stores a year they will one day outnumber the number of McDonald’s locations. SUBWAY ® restaurants Franchise fee: $12,000 Start-up cost: $69,300 to $191,000 Basic royalty: 8% Advertising royalty: 3. 5% BLIMPIE* Franchise fee: $18,000 Start-up cost: $99,321 to $338,200 Basic royalty: 6% Advertising royalty: 4% BURGER KING* Franchise fee: $50,000 Start-up cost: $240,000 to $2. 5 million Basic royalty: 4. 5% Advertising fund: 4% COUSIN’S SUBS* KFC McDonald’s Franchise fee: $15,000 Franchise fee: $25,000 Franchise fee $45,000 Start-up cost: $200,000 average Start-Up Cost: $250,000 Start-Up Cost $432,000 to $715,150 Basic royalty: 6% Basic royalty: 7. 90% Basic royalty: 12. 5% Advertising royalty: 2% Service fee: 4. 90% Module 15 – DETERMINING ORGANIZATIONAL FINANCIAL RESULTS Revenue Sources In 2008, Subway made $926. 2 million dollars in sales. That is a 1. 9% sales growth for the sandwich shop chain. In 2008 they employed 700 employees working at their headquarters. They are expecting a 9. 7% growth within their work force. Due to the fact most stores are a franchise the profit margin varies from store to store because they are independently owned. Therefore each store must pay their employees from each stores profit instead of coming from a corporate office. (Doctor’s Associates Inc) Operating Costs Due to the fact most Subway restaurants are privately held by different individuals the operating cost varies from location to location. Generally speaking each store must pay 8% of their sales to royalty costs. The cost in which it takes to run the stores will include land or rent payments, the cost of raw materials in order to make the food, electricity, and any other services in which the store might need to be successful. Start-Up Costs In order to open up a new Subway restaurant a business will need $78,600 to $238,300 for their total investment. The initial franchise fee is $15,000 with royalties of 8%. The owner of the new store has to agree to the terms of agreement for 20 years. (Franchise Mall) Profitability According to Doctor’s Associates Inc they cannot promise any projected profit or return on investment for new Subway franchises. Doctor’s Associates Inc release this statement because there is no magic formula in order to make a Subway franchise be success. Although In 2009, Doctor’s Associates made $926. 2 million dollars in sales from their 8% royalties. That is a 1. 9% sales growth for the sandwich shop chain. It is hard to get an actual number on how profitably each franchise is due to the fact they are all independently owned. Location and the customer base are all factors on how successful each location is. ( Subway) Action Plan With around $300,000 a person can open their own Subway restaurant store. 8% of the stores revenue will have to pay back for royalties. To be very successful and make a nice living a person will need to own and operate several stores. There is money to be made and a market to be taken. (Subway) MODULE 16- MEASURING INTERNATIONAL BUSINESS SUCCESS Financial Gains The profitable Subway franchise will undoubtedly profit from our operations in Brazil. Merging Subway’s success with Brazil’s culture will be Subway’s primary interest. Economic Benefits Subway’s focus will be equal opportunity for males and females alike- the majority of Brazil’s workforce is made up of men who earn higher salaries. Social Benefits Expanding Subway’s franchise to Brazil will be the stepping stone to expanding in neighboring countries. Because Subway will be adapting Brazil’s culture into our products and services, we will be preserving and enhancing Brazilian culture. Social Costs Subway was founded in the United States, a country with values much different than Brazil. In fact, many American values are considered to be offensive in the Brazilian culture. We must closely monitor our company’s practices prior to expansion. References countrystudies.us/brazil/82.htm.