Guam Case

October 26, 2017 Tourism

Case: Guam’s Visitors’ Bureau Assignment Questions: 1. What internal constraints does GVB face in becoming a more powerful player? Following are the internal constraints that Guam Visitor’s Bureau faced, * Guam as an organization had a large size of Board of Directors, i. e. 13 to be precise; * This huge size of the committee and formal lines of communication resulted in slow decision making. * Lot of external factors determined the selection of members in the Board of Directors, i. e. GHRA(Guam Hotel and Restaurant Association), GTF (Guam Tourist Foundation), JGTA (Japan Guam Travel Association), etc. GVB had a huge organizational structure, lot of silos existed in the organization. * Employees with limited or experience were hired in GVB which resulted in low productivity and negative feedback to GVB. * General Managers job in GVB was a very difficult as it required aligning various interest groups together. The various interest groups that existed in coherence to GVB were: GTF, JGTA and GHRA. * It was very difficult for GVB to find skilled labour and they had to import labour from Asian countries. One of the major problems with GVB was that, most of the employees were either too young (starters in the industry) or very old (in the phase of retirement). 2. Conduct a resource analysis of Guam’s resources. Resource analysis of Guam Resources:- a) Human Resources a. Very limited skilled and unskilled labour, need to get from Asian countries b. Very young staff was sent to Guam for exposure or very old staff before retiring was sent. This caused poor service. c. International hotels & Restaurants never sent their top staff to Gaum. ) Transportation facilities d. Tourism was overly dependent on Airlines companies which sometimes stopped their services owing to low business. e. All the consumer items for visitors were imported from far places by ship, which in turn made up everything on Guam costly. Also Very few cruise ships docked. f. Due to buses running services only on Guam Island timing, visitors use to opt for rental cars. c) Natural Resources g. Rich in scenic beaches which could attract tourists. h. The weather on Guam was very pleasant which made it an ideal location for tourists. . It was also considered as a desired destination for diving. j. Waterfalls, mountains and caves were added advantage. 3. Assess the stakeholders in the distribution channel, their positioning and the level of integration in Guam’s tourism industry. The hotels and restaurants association, tourism foundation, the travel agents association are the various stakeholders which come under the distribution channel a. GHRA – An association of hotels & restaurants in Guam to help the members by addressing their issues.

The hotels believed that they provided superior service and customers had a great regard for their hotel specific product. b. GTF – A tourism foundation to promote awareness tourism industry to community and also improve relationship with the tourist market through community services and destination enhancement projects. c. JGTA – An association comprised of travel agents. They accounted for 85% to 90% of all visit arrivals from Japan to Guam. Korean and Chinese tour operators were also purported to consolidate their GUAM booking through JGTA.

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They were positioned excellently that they were able to negotiate the best prices to the customers. The American government had a system in place to look into the functioning of GVB. The five governor appointees, two legislative committees and six elected members were members of the board of directors. Every member of the GVB board also headed a committee or used to oversee a function of the organization. Members of GHRA, GTF and JGTA also held key positions in GVB board of directors which ensured that their interests were taken into account whenever any decision was made.

So, we can conclude that the organizational structure was very much integrated though it led to slow decision making and unnecessary delays in the functioning of the entire system. 4. Use BCG Matrix to determine the position of the each target market. BCG matrix is a resource allocation matrix. It helps us to decide which strategy we should follow for an industry as per its growth rate and the output with respect to competitor. By the information given in the case study, it can be inferred that Guam started well as a tourist spot and occupied and gradually became a star.

It had started well with good market share and relative market share. Over the years, other places have started rising as tourist spots and the popularity of Guam has been decreasing. Now it is in a situation such that the industry has a high growth rate but the relative market share of Guam is low. Guam is a question mark with respect to BCG matrix. Its relative market share is low on which puts it in the question mark area. It can regain its market share by adding more tourist attractions like events and other forms of entertainment which Guam lacks.

Moreover, if we categorise the different tourist attractions of guam, we can put it beautiful scenery and good beaches as a star, desirable destination for diving and tourist friendliness in the cash cow area of matrix, it can be improved so that it can come in the star category. Good wedding facilities can be eliminated and can be put in dog area of matrix. Good sports activities, trekking etc. can be put in question mark area. 6. Conduct a SWOT analysis of Guam’s tourism industry Strengths Unspoiled, non-crowded pristine coastal environment with pleasant weather Duty-free shopping and American culture

Geographically close to Japan and other South-east Asian countries Multi-ethnic and multi-cultural society Good for family vacations Weaknesses Perceived lack of activities, events and things to do on Guam Non-delivery of continuous quality service Under-utilization of in-house meeting facilities in hotels Slow decision-making by GVB Limited supply of skilled and unskilled labour in Guam Dependence on shipping for most supplies Inefficient bus transport services Locals unfriendly to Japanese tourists Opportunities Other South-east Asian countries (e. g.

China) are huge potential markets duel to increasing affluence Adventure and cultural tourism Sea-cruise stopover destination Major Air route tourist destination Threats Typhoon damage Presence of military bases makes it sensitive to negative macro-economic political developments Lack of government money to further develop tourism Airline companies stopping flights to Guam Interest groups interfering in GVB decisions Hostility of locals towards Japanese tourists Other countries also eyeing the lucrative Japanese tourist market 7. Conduct an assessment of Guam’s tourism industry using the Porter’s 5 forces model.

Bargaining Power of Suppliers – HIGH Heavily dependent on airlines and hotels, possibility of their withdrawal Heavily dependent on shipping from foreign countries for most supplies, possibility of their withdrawal Bargaining Power of Buyers – HIGH Tourists can easily choose to visit other tropical places in the region 60% of Guam’s gross revenue and 35% total jobs due to tourism Rivalry – HIGH Ten other countries in region also vying for lucrative Japanese tourist trade New Entrant – LOW Difficult to replicate Guam’s natural beauty High capital cost required

Substitute Product – HIGH Easy for tourists to choose similar destinations in the neighbourhood region without much increase in cost 8. Can the GVB or the government of Guam decrease the bargaining power of the suppliers? The GVB or the government of Guam would find it difficult to decrease the bargaining power of suppliers because of the following reasons: a) Since there are very few suppliers in a remote and small island like Guam it is difficult to find alternatives. b) There would be additional costs involved in switching which would be difficult to manage with Guam’s budget. ) Since Guam is a small island it has small volumes of purchases. d) Guam is highly dependent on its suppliers. 9. What generic strategies does GVB have to improve business performance? a) They have a differentiation strategy, in that they propagate an unspoiled, non-crowded and pristine environment. b) They also have a focus strategy, in that they target more strongly customers from Japan and Korea. There was a visa waiver program in place for Japanese and Korean tourists. 10. If you were the GM of GVB, how would you improve ‘Destination Guam’?

If I were the GM of the GVB I would try and improve the world’s perception of Guam through the ‘Destination Guam’ ad campaign by adding value to the Guam brand. Currently Guam is perceived as being a beautiful island with unspoiled, pristine beaches and a place far off from all the hustle and bustle of the crowded cities, all owing to thesuccess of the ‘Destination Guam ad campaigns. However they have so far failed to accurately depict all the other aspects of Guam thus leading tourists to feel frustrated and disillusioned due to the perceived lack of activity in Guam, hence leading to a loss of potential and existing visitors.

What can be done now in order to change the worlds perception of Guam would be to modify the existing ‘Destination Guam’ by making it depict all that Guam has to offer to the world. For instance, in addition to the beaches that adorn Guam’s coastline, Guam has a plethora of man-made attractions including malls, parks, health and wellness facilities, entertainment and activity centres, golfing facilities and fine dining options; all this aside from the Spanish, Japanese and post – world war 2 heritage sites.

Each of these can be easily depicted in an appealing manner so as to change and add to the current perception of Guam and thus take Guam to a position in the minds of potential vacationers where-in they associate it with more than just another beach destinationand more of an all in one destination complete with sun sand, culture, shopping and an active party scene. 11. If you were the GM of GVB, how would you grow the number of visitors?

If I were the GM of the GVB I would try to first enhance the ‘Destination Guam’ campaign to depict Guam as more than just another beach destination with little else to do. I would work toward improving the transportation facilities available to tourists. Additionally enhance the port and docking facilities in order to encourage more cruise ships to dock at at Guam thus bringing in a whole cruise load of tourists who can spend a day or two on shore at Guam.

Promote American and post-world war 2 heritage sites as tourist attractions. Work toward eradicating post occupation resentment toward the Japanese as they form 80% of the tourists who pick Guam as a holiday destination and in doing so increase customer satisfaction and promote return visits. Increase employee retention and employee training in all tourism related areas to promote dissemination of information and experience based knowledge, thus indirectly increasing customer satisfaction and promoting return visits to Guam.

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