Business Strategy in Tourism

Business Strategy in Tourism

How To Create and Implement Effective Business Strategy in Tourism and Hospitality

This guide helps tourism businesses better understand what it means to not only have a strategy, but also to actively be using one; articulate the importance of strategic approaches; and start building or updating your own business strategy.
The Essentials in Short
  • Being clear about your tourism business’ purpose (why you do what you do) is critical to ensuring that your strategy is useful, relevant and impactful.
  • Your business’ sustainability efforts should be part of your business strategy, and NOT a set of optional “special activities” to be treated differently from your business priorities.   
  • Your strategy can, when done well, be a useful tool for engagement. However, don’t focus too much on writing perfectly or producing a beautiful document.
  • Focus instead on learning from, and applying the lessons to be found in the process of building your strategy: reflecting on the purpose of your business, the values that you create, and the people you serve, and by doing so, gaining clarity on what makes your business unique.  

 

In This How-To Guide

Does your tourism business have a strategy or a strategic plan?

If your answer is “Yes, but…” (as in, “We have a nice strategy document but it’s not being used”), “No”, or “I don’t know” (don’t worry, you’re not alone if this is the case), well, you’re in the right place!

We are a firm believer in a solid foundation of good management approaches, and a smart business strategy that is effectively being implemented is a key part of good management. So, this guide helps tourism businesses of all sizes better understand what it means to not only have a strategy, but also to actively be using one; to articulate the need and importance of strategic approaches; and to start building or updating your own business strategy in a way that fits your priorities.

Rather than working on a strategy just because you think you need one, your strategic planning process will be more efficient and effective if you understand what a business strategy is for and how you will make use of it for your tourism business.

So, with that in mind, let’s dive in! 

1The Basics: Relevant Terms and Concepts

To start with, let’s make sure we are on the same page about what we’re talking about when we say “strategy”.

Business Strategy

Here are a few ways of defining and describing the term business strategy:

  • “A business strategy outlines the plan of action to achieve the vision and set objectives of an organization and guides the decision-making processes to improve the company’s financial stability in a competing market.” (Source: Consulterce)
  • “Strategy is choice” (Source: Jeroen De Flander)
  • “Strategy defines the company’s distinctive approach to competing and the competitive advantages on which it will be based. A good competitive strategy is one that creates unique value for a particular set of customers.” (Source: HBS Institute of Strategy & Competitiveness)

Before we dig deeper to help answer key questions about the what, why, and how of business strategy in tourism, here are a few notes on related terms.

Business Plan

A business plan is “a guide—a roadmap for your business that outlines goals and details how you plan to achieve those goals" (Source: BPlans). There may be different opinions about the value of having a business plan, whether you should start with a plan when starting a business, and how long or formal a business plan should be.

It seems, however, that many business leaders and entrepreneurs agree that the process of writing a business plan has great value, as it forces you to think critically about your business idea, and to hold yourself accountable for the growth and success of the business.

"What you need is a concise and focused plan to help you chart your course and hold yourself accountable" - Dave Skibinski

Having a business plan is not necessarily the same as having a strategy. While a plan is what you set up to clearly define the purpose of your business, a strategy is what you need in order to specify what is used to accomplish specific goals.

Action Plan

An action plan, as the name suggests, is a plan that outlines the specific action steps to be taken or activities to be performed in support of your business strategy. It is a tool or a document (which may be in the form of a checklist) to be used as part of strategic planning.  

To concretely define how you will achieve your goals, each of these action steps should be written with a verb, indicating it’s something to do, a task to complete, and not just stating a goal.

Equally important is that the responsibility of ensuring such action steps are fulfilled is also clearly defined. One person must be responsible for each action step, and the accountability for tracking and ensuring progress must be clearly documented.

You need an action plan to help achieve your goals. Defining action steps and completing those steps will be much easier and more meaningful, if you set meaningful goals. To do so, the SMART Goals framework, often cited in business and project management contexts, serves as a useful guide.  

2“Business Case” for Your Business Strategy

To get started on thinking about your business plan, it may be helpful to browse and learn from a template or a sample plan. Of course, you need to be aware that the process of thinking about the what, why, and how of your own business plan is just as important as the document itself, and that you cannot, therefore, rely on a template to do the work for you.

3Key to Your Strategy: Know Your Business

There may be different opinions about the value of having a business plan, whether you should start with a plan when starting a business, and how long or formal a business plan should be.

It seems, however, that many business leaders and entrepreneurs agree that the process of writing a business plan has great value, as it forces you to think critically about your business idea, and to hold yourself accountable for the growth and success of the business.

 

4Key Components of Your Strategy

Whether your aim is to produce a one-page concise summary or to create a detailed 30-page plan, here are some key components of a business plan which will be helpful for you to consider.

 

5Strategic Planning as an Iterative Process

While it's important to recognize these benefits of writing a business plan, be sure not to focus too much on the "writing" part of business plan writing.
You may spend a lot of time perfecting the plan and fine-tuning the language, but a business plan is not a static thing that will stay in its original form once it's prepared.
Instead, focus on the process of developing, maintaining, testing, and continuously refining your plan as a living document in order for it to serve as a useful business tool.
Your business plan will be revised and updated as your business evolves. With this understanding, you can turn the business plan writing process into a practical and valuable business development experience by taking an iterative approach to gathering "evidence"; e.g. feedback from prospective customers, and assessment of your intended target market.

 

6Resources and Tools to Help You Get Started

To get started on thinking about your business plan, it may be helpful to browse and learn from a template or a sample plan. Of course, you need to be aware that the process of thinking about the what, why, and how of your own business plan is just as important as the document itself, and that you cannot, therefore, rely on a template to do the work for you.

7Bring Your Strategy to Life: Commitment to Continuous Improvement

Building on the lean canvas concept, the business model offers detailed descriptions of common approaches to and interpretations of lean canvas, and the nine blocks of the canvas that a business model should include.