Business Proposal: The Emirates Airhotel Essay Example

and 13 new aircrafts are in order for future operations (www.planespotters.net, 2011). It provides scheduled passenger and cargo services to more than 100 destinations in over 60 countries.

'The group has operations across the Middle East, Europe and Americas, Far East and Australia, West Asia and Indian Ocean, and Africa. It is headquartered in Dubai, the United Arab Emirates and employs 36,652 people. The Emirates Group has various subsidiaries such as Emirates Tours, which offers specialized operations in luxury package holidays' (Marketline, 2010).Emirates airlines, the Dubai national carrier, has reported a 351% increase in net profits in six months during 2009, reaching 3.4 billion dirhams ($925 million).

The largest Middle East carrier carried 15.5 million passengers in six months, up 17.3% from the first six months of the previous year, with a passenger seat factor of 81.2% (Mintel, 2010).

Business Opportunity

A typical Airbus A380 from Emirates provides space for 489 passengers including 14 First Class suites, 76 Business Class seats und 399 Economy seats on two decks (www.ameinfo.com, 2008).

The aircraft will be adapted by replacing all current seats with First Class suites. The upper deck will contain 24 luxury First Class suites with double and single beds (shown in figure 1), minibar, exclusive en-suite shower and toilet facilities (shown in figure 2), as well as an excellent service provision in terms of food and drink. The entertainment is provided by the carrier's third generation ICE (Information, Communication, Entertainment) system, which offers 1,100 channels of audio and video choices, as well as SMS and telephone capabilities (www.ameinfo.com, 2008).

The multi-lingual cabin crew will consist of 20 members (most of them air-hostesses, cleaning and kitchen staff) to ensure a high standardized

service provision to the passengers. An experienced travel physician will be on board and on the trips during the 14 days to offer medical services to passengers if required.The upper deck will act as space for the First Class suites whereas the lower deck is equipped with a restaurant and bar, a 5-star cuisine, a spa section including a jacuzzi, Hamam steam room and massage room. The aircraft also provides a library of books and other publications about the places featured in the itinerary.

Figure 3: Image of a restuarant onboard Emirates A380Source: Luxuo.com (2010)The Emirates world tour package will give customers the chance to explore various destinations on six different continents namely Europe, Africa, South America, North America, Australia and Asia over a period of 14 days. The idea is comparable to a package holiday on a cruise ship, but less time consuming and more efficient. There will be three different world trip routes on offer including various combinations of destination countries to suit customer preferences. The flights will take place overnight (min. 5 hours, max.11 hours duration) allowing passengers to get enough rest to explore places in the day.

The 14 day world tour goes in a zigzag above and below the equator to another destination each day. To tackle the problem of jet lag the world trip route goes in a western direction through countries and timezones. 'Jet lag is worse when travelling from west to east because the body finds it harder to adapt to a shorter day than a longer one' (www.nhs. uk, 2010).

Two experienced and competent tour guides will accompany the tour group during the entire trip.Furthermore, the tourists will be

provided with a daily itinerary which informs them what they will experience during each day trip. The aircraft will land in the destination country at around 6 am and breakfast will be served at 8 am local time. Soon after, the tourists will leave the aircraft (between 9 and 10 am) to begin their day trip. The passengers generally leave their main luggage on the aircraft during the day trips and take hand luggage with them.

At each airport there will be desginated check-in and check-out desks provided by Emirates which accelerates the process and avoids long queuing times.After checking out, the tourists will go on modern and air conditioned coaches to get to the sights. The day trips will last for approximately 12 hours each day depending on the destination which allows enough time for the sightseeing tour including several breaks and lunch at a noble restaurant. During that time, the aircraft stays at the airport and will be prepared for the next flight in the evening.

Furthermore, the cabin crew will be accommodated in a hotel near by each airport where they can get enough rest until the next departure in the evening.Returning from the day trip (around 9 pm), the tourists will check-in and board the aircraft where dinner is ready to be served. In addition, there will be themed nights each day depending on the destination country with traditional food, drinks and entertainment.

Target market in the UK

These customers are some of the most successful and affluent people in the UK. They live in wealthy, high-status, semi-rural and suburban areas of the country.

Furthermore, they are middle-aged or older people predominate, with many empty

nesters and wealthy retired. They are very well-educated individuals with high levels of academic qualifications. Most are employed in senior managerial and professional occupations or running their own businesses. While they are less willing to cut their use of cars or planes to help the environment, they tend to be pro-environment" (www. caci.co.uk, 2010). In addition, they are keen travellers who show an interest in different cultures whereas long-haul flights is not a deterrent to them. These customers enjoy a high standardized service provision.

Marketing and sales strategy

Why people will buy this? This is a unique business idea, which combines two extraordinary services: A five-star hotel on a modern aircraft and a world trip in 14 days. Through purchasing this luxury service product customers will have the unique opportunity to visit various destinations on 6 continents in a short period of time which envisages non-stop excitement. Moreover, this service product fosters cultural interaction and provides educational benefits. As well as this, potential customers can broaden their horizon and fulfil their aspirations.

Selling this offer. The price of this product will be set at �50,000 per person, but will justify its value in terms of quality and what is on offer for potential customers, as well as the target that is being reached. Emirates want potential customers to see this offer as sophisticated and very up market, portraying high levels of standards and service.

In addition, Emirates will offer this service/product through its own website, enabling the chance for potential customers to find out more information about this offer, as well as having the opportunity to book this world tour package online. Moreover, there will be a slideshow

of images on the website featuring the interior design of the aircraft to try and entice customers to be a part of it. Emirates also plans to offer this luxury tour package in high end travel magazines and more up-market travel agencies, where the likely wealthier customer would be looking at potential opportunities to go on expensive and extraordinary tours/holidays.

Desk research: Competition

The luxury market is increasing in popularity, which will act as a catalyst for Emirates Airhotel to flourish in the market. Data supports this as the 'Luxury holiday volume hit a high point in 2008, making up just over 5% of the total holiday. Forecasted figures estimate that luxury holidays will increase to just under one million by 2015' (Mintel, 2010). However the increase in popularity within the luxury market has substantially come from the Cruise sector, which Emirates Airhotel will face its main competition from.

Emirates Airhotel will face intense indirect competition and will be competing across the board with various cruise companies that offer this similar type of world tour package. It's imperative Emirates tries to gain competitive advantage even though they will not be in direct competition with another airline company.

Differentiating the competition allows Emirates Airhotel to have a unique selling point, something in which customers will be attracted by. The unique selling point will enable customers to see the world at a faster pace and more efficiently, as well as providing for single markets and giving the opportunity for potential customers to explore destinations.

Cruise companies have developed significantly in recent years. The popularity in cruise travel is evidently down to an increased demand in leisure travel, as well as customers

choosing to go by cruises for relaxing and luxury purposes. Emirates Airhotel will come in intense competition with cruises, especially as the same sort of wealthy tourist will be targeted by both.Princess cruises are one type of Cruise Company that Emirates Airhotel will face in terms of a similar product/service offer. 'Princess cruises offer cruises to more destinations than any other cruise line, Princess Cruises' liners visit all seven continents on more than 150 itineraries that range from seven to 72 days and visit some 260 ports' (Mintel, 2007). The longer day trips designate the world tour trips in which they offer.

Statistics shows and illustrates why Emirates Airhotel will be in fierce competition from various cruises who offer this similar world tour package. Although the data is a few years old it still corresponds with today's current trends. 'Beach holidays have witnessed a significant decline over the past five years, whilst, relatively speaking at least, cruises have experienced a phenomenal 63% growth. Cruises are now almost as popular as the much loved city break and have exceeded the popularity of coach tours' (Mintel, 2007).

In addition, further data suggests its increased popularity has been in part, due to the 9/11 attacks, which had a devastating effect on the airline industry. 'The total number of cruises taken between 2002 and 2006 has increased by 32%, which has largely been driven by the significant ocean cruise sector' (Mintel 2007). Once again, this emphasizes the competitive nature that Emirates will have to fend off as cruises exploit any weakness or setback in the airline industry.

Furthermore, more recent up to date figures confirm the precarious competition that lies ahead for

Emirates Airhotel. There is evidence that despite the economic downturn, 'the UK cruise market could still reach two million passengers by 2012, an increase of half a million from 2008'. (Mintel, 2009). In this instance it shows how significant cruises are on the UK market, but also the impact this sector has on just one part of the world.

People choose to go on cruises for many reasons. As it's such a popular choice for world tour packages, one of the main reasons is to experience luxury and comfort, which cruises specialise in. People also look to go on cruises as a good way of visiting and exploring destinations and is supported in figure 2 as 45% responded to this as one of their main attitudes towards cruises.

It's important Emirates Airhotel offers something different and increases the quality of its offer to fend off competition from Cruise companies such as Princess Cruises, who will be offering a similar sort of package. Cruise companies are criticised by some as having outdated sanitation systems that are insufficient when trying to prevent the spread of viruses.

Emirates Air hotel will carry less people than compared to the numbers in which Cruises capacitate for, therefore; the risk of viruses spreading on board an A380 should be less problematic. Cruises are seen as very Couple-centric, and regularly ignore the single market in world tours. Emirates Airhotel will adopt opportunities for both couples and the single market, as there will be both single and double luxury rooms available to customers.

Moreover, customers will be able to see different destinations each day through Emirates Airhotel, which creates an energetic and lively tour package. In comparison

cruise world tour trips spend a vast amount of time at sea, which becomes tedious at times and generally doesn't enable tourists to go offshore for long.

This business opportunity is going to have a significant impact on the environment. During this tour the aircraft will endure a number of air miles contributing to increased carbon emissions. Significant causes of this will add and intensify climate change, thus contributing to poorer air quality for people to live in. For the people involved it; being the passengers, it will be an exhausting two weeks for them. Flying from one destination to another takes a lot out of a person.

Different time zones will play a factor and have a significant bearing on the well-being of passengers. When comparing this to cruises a lot of passengers will be relaxed on board a cruise ship and have the freedom to move around and go outside. For the staff, it will mean demanding work, having to look after a number of passengers whilst on board. Room service for example is paramount to the customer's needs; therefore staff will have to be on hand at all times.

The barriers that threaten the Emirates Airhotel would have to be overcome in order for this service/product to flourish in the luxury market. The threat of terrorism threatens tourists perceptions about flying, especially since the 9/11 attacks. The world political situation is unstable so it's important its keeps its passengers safe as a number one priority.

Cruises have seen an increase at the expense of terrorist activity in the airline industry. To overcome the threat of terrorism and succeed, Emirates Airhotel will offer high security measures so

the threat of terrorism is diminished and everyone can feel safe when flying. Furthermore, natural disasters are very common these days, in part, due to global warming, so in this instance alternative routes need to be offered around the world. This is so it doesn't affect the enjoyment for customers and doesn't come in contact with destinations coping from an internal or external event that prohibits people from visiting.

Conclusion

In conclusion, Emirates Airhotel has the potential to flourish over the next few years. Supportive data points out there has already been a rise in the luxury travel since the beginning of 2009 and looks set to continue over the next few years. Its competition with various cruise companies like Princess Cruises who offer world tour packages will create a highly attractive battle. However, Emirates 'Airhotel' does offer that unique selling point and differentiates it from its main competition, which can potentially lure customers away from going on Cruises.