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Tourism market analysis Polish economy

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Contents Introduction ------------------------------------------------------------- 0 Tourism market analysis of the CEE economy ----------------------------------------- 1 Tourism market analysis Polish economy ----------------------------------------- 2 Analysis of existing competition in polish market ---------------------------------------- 3 An analysis of who your customers might be in the market of your choice ------------------------------ 5 The risks and uncertainties that are involved through entry to the market ------------------------------ 9 Recommendations ------------------------------------------------------- 12 References ----------------------------------------------------------------- 13 1. Tourism market analysis of the CEE economy In spite of the fact that tourism industry of Central and Eastern European countries has been consistently growing in the past ten years in general, it has also been through some difficult times in past few years. After the excellent year 2000, the attack of 11th Sep came in the third quarter of 2001, a year that had already seen a slowdown in international tourism caused by weak growth in the economy, decreased consumer confidence of travelling, especially by air. Moreover the factors of floods in Central Europe, premeditated terrorist attack against tourists in Bali and Kenya, the Middle East conflict and the Iraq crisis also had negative impacts on tourism and leisure industry within CEE even worldwide. Due to the recovery of CEE economy since year 2003, tourism and leisure also has come to life. According to the statistics of World Travel and Tourism Council on Travel and Tourism spending in CEE, personal spending sector had a 1.8% real growth in 2003 while business spending sector had 0.1%; with a more remarkable performance, there is a 3.8% real growth for personal spending sector and a 2.5% real growth for business spending sector in 2004 which indicates that tourism industry strongly depends on economy and at the same time has consistently outperformed GDP growth. Also according to the data of World Travel and Tourism Council for CEE, 0.8% real growth of Travel & Tourism GDP Associated with Visitor Consumption (Direct) ...read more.


and Euromonitor state that international tourist receipts for Eastern Europe were $31224 million in 2003, 6.3% of the total international market compared to Western Europe with $234583 million and 47% of the total market. International tourist receipts for Poland alone were $4307 million and forecasts by the WTO estimate international tourist receipts to grow to $15150 million in 2008 a growth of 13.5% in five years. This growth takes into consideration Poland accession into Europe. According to the Global Market Information Database (GMID) Poland has 10.2 million international arrivals each year compared to 40.2 million in the US and 20.4 million in the UK. If a global hotel chain were to invest in Poland there is a sufficient existing international market to pose demand. Socio Economic Segmentation * Income * Education Income Income facilitates expenditure; however it can not determine expenditure. According to the CIA World Fact Book, GDP per capita in Poland was $7200 in 2002 compared to the UK with a GDP per capita of $27700. Standards of living are low and in comparison with the UK disposable income is significantly lower. Consumer expenditure in Hotels and Catering in Poland in 2002 was $3511.7 million, a growth of 4.5% between 1998 and 2002. Education The Institute of Tourism states that between 1999 and 2002, twice as many people with a higher education background travelled than those with an elementary education. Population by Educational Attainment 1990-2000 1990/2000 1990 1995 2000 % growth '000s Primary & No Education 11,442.6 10,953.2 10,292.5 -10.05 Secondary 14,976.4 16,444.7 17,742.7 18.47 Tertiary 2,006.4 2,260.2 2,864.8 42.78 TOTAL 28,425.5 29,658.1 30,900.0 8.71 Source: Euromonitor estimates based on trade publications and industry sources Note: Data refer to population aged 15+ In Poland 90.7% of the population are only educated up to secondary level with only 9.3% of the population educated to University level. However this figure has grown in the last ten years at a rate of 31.35%. ...read more.


According to Peter Cullen (1997) there are five basic principals for survival in the economic environment. * The product must be right for the market * Structure of production is appropriate * Timing is correct * Staff must have the appropriate mix of skills and abilities * Management style and structure is appropriate On analysis of the CEE economy, the Polish economy, the competition in the market, the consumers in the market and the risks to entry. I think we have proved that despite the risks, all of the above criteria have been satisfied and a large UK hotel chain will thrive in Poland. Lehman Brothers Global Investment Bank developed a methodology for assessing the risk in Global Emerging Markets (GEM's), the Damocles Report. By assessment and analysis of 10 specific objective factors. * Foreign reserves and imports * Foreign reserves / short term external debt * External debt as a % of GDP * Short term external debt as a % of GDP * Current account as a % of GDP * Broad money / foreign reserves * Domestic / Private credit as a % of GDP * Real short term interest rate * Stock market index * Real trade weighted exchange rate Poland was rated out of the 17 GEM's; Argentina, Brazil, China, Hong Kong, Hungary, Indonesia, Malaysia, Mexico, South Korea, The Philippines, Poland, Russia, Singapore, Taiwan, Thailand, Turkey and South Africa. In the second quarter of 2004 Poland was rated against the other GEM's and had the top score denoting the least risk involved in investment into the country. The large UK hotel chain should firstly invest in Warsaw, the capital of Poland. This is the main business centre and where budget airlines fly to from regional airports throughout Europe. Once the company has established itself in Warsaw it could invest in other cities in Poland such as Krakow. This could also lead to expansion in other CEE countries. ...read more.

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