Franchising tourism economic efficiency in Kazakhstan

Table of contents: The Kazakh-American Free University Academic Journal №10 - 2018

Author: Zagainov Yevgeniy, Kazakh-American Free University, Kazakhstan

The Conception of tourism development in the Republic of Kazakhstan says that tourism has one of the major roles in a world economy. According to World Tourism Organization’s (WTO) data it provides tenth of world gross national product, over 11% international investments, every 9th workplace in a world production, and Kazakhstan, with it’s huge natural resources, has a unique ability to take it’s niche in a world tourist market.

There is a lot of attention devotes to tourism development in East Kazakhstan region in recent years. The emphasis is made to incoming tourism and to increase the flow of foreign tourists not only in summer and wintertime, but also in off-season.

In Conception of tourism development in Kazakhstan on 2020 year, East Kazakhstan marked as a center of ecological tourism.

In this conception registered a phased plan of region improvement, from the building of a new hostels and recreation zones to provision of new objects with literate managers and simplification of tourist formalities.

East Kazakhstan has a huge natural and resource potential, which will allow turning the region in one of the major tourist center of a country with the right development and use. All the kinds of tourism are developing energetically.

Also it is necessary to mark a positive dynamics in a hotel industry, which grows as quantitatively, as qualitatively. The quantity of tourist firms and a number of concerned in tourism grows annually.

The tourist market of the Republic of Kazakhstan is under constant development and improvement. A number of entrepreneurs increase with it in small and medium-sized businesses who want to start their own business in the tourism industry. Purchasing a franchise of tourist enterprise seems to be one of the most convenient, simple and logical way to achieve these goals. Demand creates supply, consequently - the franchise is one of the priority directions of development at the present stage for most players and the market participants.

Market volume of hotel, recreational and tourist services of the Kazakh sector of service for travelers steadily increases over the last decade. According to estimate of domestic analytical companies, volume of the tourist service market in Kazakhstan will reach several billion US dollars at current rates of growth in 2020.

Economic and social prerequisites for growth dynamics are increasing solvency of the population, the development of a society's culture and consistent evolution of the tourist infrastructure, as well as increasing level of penetration of remote banking services, the Internet and Internet services in all areas of service.

Tourism product and its direct sales - are the most important links in the enterprise operating in the tourism sector. What is the aim of each travel agency? One of the main goals of the company is increasing its economic efficiency and income. Profit-making and increasing income implies availability and increasing number of loyal customers.

Consumers and clients can be attracted and retained, if they are interested in obtaining a particular service at a particular firm. Service must meet the high level quality of services offered by travel company.

According to leading foreign travel companies, sales and promotion of tourist services will be effective, if the first, the objectives and needs of the client are defined, and the second, affordable product or service is created and offered. Achievement of the objective of travel companies is the development of products and services in strict accordance with the requirements of the client. Also they depend on the more intensive sales, more assertive in the implementation of the tourism product. That is why this topic is relevant in the tourism cluster in Kazakhstan.

Concepts of modern sustainable business development are widespread in market conditions. Principles of the so-called sustainable development concept defined in almost all areas. The role of tourism becomes more important into the global economy each year. It is a main constituent of the internal budget in many countries; therefore its ideas do not remained aloof.

According to practical analysis of modern tourism industry firms in East Kazakhstan, primary goal of every enterprise is qualitative representation of travel services. It requires implementation of all specific requirements which are dictated by market needs and security services. It is important to consider features of the services included in the concept of hospitality.

Efficiency is defined as the achievement of any specific results with the lo-west possible cost or the maximum possible volume of product of a given amount of resources. Efficiency means getting some definite effect, i.e. effectiveness of result.

Almost everyone talks about necessity of effective tourism. Annually the number of published materials increases, aspects of influence and relationships with other industries for sustainable development expands. But there are not precise criteria for assessing the state - it is effective or not. This is due to the need to integrate large number of factors, and large internal differences.

A sale of products begins to play an important role in the success of any tourism enterprise in transition to a more «deep» market relation. Increased competition forces enterprises to go for big concessions to consumers and intermediaries in marketing their products.

Economic efficiency is the result of which is expressed in a definite benefit achieved under certain cash costs, material and information resources and manpower.

Economic benefits of tourists (travelers) service means getting a prize (economic impact), from:

- production and maintenance process of a travel company;

- tourist services of the population;

- service management.

Economic efficiency of service is a component of the overall effectiveness of social labor and expressed by certain criteria and indicators. The criterion should be understood as the basic requirement for evaluating the correctness of the task.

Necessity of criterion arises because it should be clearly defined what products should be addressed to the calculation of the efficiency of production and service process.

Social production functions in the public interest, so the efficiency should be evaluated based on the degree of achievement of the society goal.

Production efficiency criterion is achieving best results in the public interest at the lowest cost of funds and manpower.

Problems of efficiency of service should be considered using a systematic approach.

Systematic approach involves setting different criteria and indicators for different levels of management and a definite hierarchy of goals and their performance criteria:

- Minimum cost of money, material and information resources and labor per unit of the tourism product;

- Maximum of production and sale of the tourist product, development of tours, forming a quality package;

- Maximum realization of tourist vouchers.

Each tourist enterprise develops its service strategy. It consists of action plan that determines how it will compete in the relevant market area.

Service strategy focuses on three main components of any business in the tourism sector:

1. Customer needs - what needs and costs of consumers we serve.

2. Ability of company to meet those needs - whether company has sufficient knowledge and experience to serve better than anyone.

3. Long term income - how company should serve to have an income that allows to be competitive for a long time and get a reasonable profit on invested capital.

Service strategy is the general action plan defining priorities of strategic objectives of service. The achievement of these objectives helps to create positive image of the travel company, have loyal consumers and stable financial position in the market.

We should pay attention to the basic components of services for tourists, providing priorities in tourism enterprise:

1. Information. Service begins with the selling tours. Therefore, comprehensive and reliable information, both for tourists and for partners - agents is one of the main tasks of service. Consumption of tourism product (its purpose, conditions, content, prices and service levels) should be clear to seller or travel agent and acquiring tourist. Agent must have catalogs, visual route maps, terrain maps of recreation, tariff for various tourism services, booklets introducing the attractions and facilities for recreation; conditions of travel insurance and vehicles.

2. Functions of travel agency consist of the need for continued rapid communication with service providers. Therefore, desk books of agent are address book, telephone book, telefax directories, advertising and informational booklets, hotels handbooks, schedules of vehicles.

3. Communication with tourists and registration data of tourists should be ensured through escort or guide. These are made in the sake of safety.

4. Insurance guarantees for tourists should be provided within certain rules. Travel agent must help to choose the most reliable and profitable tourist insurer.

5. There is compliance with the tour-related technological features and compliance with needs of clients.

In conclusion all of the above, we have worked out several recommendation of service technology in the consumption of range of services compliance with which ultimately will have a positive economic impact for most enterprises in the industry.

Recommendation consists of:

- Strict compliance provided service with paid set (ratio of price = quality);

- Target address orientation of tours to content;

- Accurate and timely provision of services;

- Optimality and mobility of service program;

- Animation of service.

Since the beginning of the XXI century, the world has witnessed a significant increase in the number of tourist arrivals for the purpose of initiation to the ethnographic heritage, and in this respect Kazakhstan is traditionally perceived as a country with great ethnic and cultural potential. There are about 80 people - representatives of different cultural and linguistic and ethno-religious communities. This diversity allows us to talk about the possibility of allocating a separate ethnic tourism ethno-cultural direction, one aspect of which, rightly considered economic efficiency.

Ethno cultural rapid revival, accompanied overall growth of interest of people to their own national identity, has become one of the most powerful responses to the challenges of globalization. To put it in the reconstruction of ethnic traditions, folklore, life, crafts, holidays and so on, it initiated the creation of a variety of ethnic park, national villages, and special programs of ethnic and cultural tourism in different countries, which in its original form preserved autochthonous culture.

Tourism is experiencing its transformative impact manifested in the formation of a new context and environment for its development, speaking as a powerful factor of globalization. Modern information and communication technologies allow its guests to form individual travel program to your own taste, enabling them to find and experience the true authentic experience. Staying among people using a different language, prefer other cuisine, using a different style of behavior - this is the meaning of the key tourism.

Given the current trends and consumer behavior in the market, businesses increasingly pay attention to the travel agency franchise, in virtue of it, franchising in tourism is developing quite well. The share of the competition is very high in the tourist business. Today, desire is not enough to start own business in the tourism, which would work well, and bring "economic impact". In this business, many companies "buy" the trust of customers with known and proven brand, opening tourist enterprise franchise.

Also, this area is very attractive because of the relatively small initial investment. This is a significant and often fundamental to the whole class of Kazakhstan entrepreneurs and small and medium-sized businesses.

Buying a travel agencies franchise, entrepreneur purchases not just a business model, but also a good help of franchisor. As practice shows, support includes a unified system of customer service (travel agencies, branded flight, own companies in the country which hosts, etc.), regular marketing campaigns, legal and accounting support, possibility of accommodation of information on the site of the franchisor, clients, which are hard to attract. The small travel agency usually takes a lot of time, effort and financial investment to do it itself. A good franchise virtually guarantees an increase the flow of customers to 30% due to a recognizable brand and an extensive client network of franchisor.

In summary, it should be noted that hundreds of franchised travel agencies do not just exist but also successfully operate in the Kazakh market today. Franchising is a real opportunity to start own business. It would wish. A quality franchisor is stable and strong company, that proven itself in the market. It provides potential investors with operate, well designed for different conditions and regions of the business model of the successful establishment of a travel company.


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Table of contents: The Kazakh-American Free University Academic Journal №10 - 2018

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