1.Introduction of people are active in different social media

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                          

 

 

 

 

 

 

 

1.Introduction

As the travel growth is getting stronger
by each day globally, Maldives is becoming more attractive as a tourism
destination with fantastic accessibility options. To cater with this high
demand Villa Hotels & Resorts holds highest number of bed capacities in the
Maldives. As the leading holder, Villa group owns and currently operates 5 well
known resorts in the Male’ Atoll, Ari Atoll and in Baa Atoll. These resorts are
managed by their own brand name Villa Hotels. Villa Hotels and Resorts offer
different standards of resorts which are 5 Stars Paradise Island, Sun Island
and Royal Island. As 4 star resorts Holiday Island Resort and Fun Island Resort
as 3 Star resort. Since 1986 Villa Hotels is committed in bringing the tourism
industries to new heights by understanding customer satisfaction accordingly
providing and promoting exceptional services that exceed all expectations
(Villa Hotels & Resorts, 2016)

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As Villa Hotels & Resorts is a
subsidiary of Villa Shipping & Trading Pvt. Ltd., The Villa group have been
invested in different industries. Which are Aviation, Tourism, Oil & Gas,
Trading, Transport & Shipping, Engineering & Project Development,
Fisheries, Real Estate, Media and in Education sector.  But the Villa Hotels and Resorts is known as
the cash cow for the whole group.

Vision

“To be a leader in corporate industry in
the Maldives” (Villa Shipping & Trading Company Pvt Ltd., 2012, Company
Profile)

Mission

“To create good customer relations
through distinctive services and to remain committed in meeting and exceeding
customer expectations through dedication in all aspects of services provided”
(Villa Hotels & Resorts, 2016).

 

As millions of people are active in
different social media platforms to bring more exposure, Villa Hotels have
their own Facebook page, Facebook shop, Instagram, Twitter, LinkedIn and in
Google Plus and most importantly their latest website with mobile optimization
feature attracts more customers. The website provides unique packages and can
do make multi room bookings which in only available in Villa Hotels website
(www.villahotels.com). Facebook page have more than 100,000 likes and twitter
with 5000 followers. According to the Villa Hotels Marketing team they are now
on process of verifying the Facebook and twitter account. Until now no
Maldivian business account hasn’t been verified by any of social media
platforms.

Villa Hotels and Resorts are planning to
go international by opening a resort in Bali or Singapore.

 

2.Factors

As to reach the
vision of the company, Villa Hotels needs to invest in a foreign market. Villa
Hotels have highest percentage share in tourist arrival to Maldives. Moreover,
going through China and Indian Market arrivals, Villa Hotels only holds more
than 40% share in Maldives. There are some factors that contribute to enter a
foreign market such as diversifying the business, Low cost, availability of
resources and to increase the profit and sales of the company (Schmidt, 2015).

Diversification
itself has potential to increase the total return and diversify the total
portfolio. The potential to increase total return is evident as because
Maldives market underperform international markets always. Moreover, Geographical
diversification is an important way for improve risk adjusted returns through
diversification (Kuepper, 2016). And Diversification enables to build a
portfolio with generally less risk than the combined risks of the individual
securities if not the company have to take unnecessary risks. Before
diversification, company needs to know which market there are targeting. A
developed market, Emerged market or is it a frontier market needed to be
decided. Because risk and return are related, investing in emerging and
frontier markets may expose investors to a higher potential rate of return –
but also bigger potential losses – compared to investing in the developed
market (Get Smarter, 2016). For example, Singapore has a developed economic
system where the country is looking for more FDI.

The importance
of investing on low cost country is also an important factor to look over. For
now, China has been the country with lowest labour cost. But year by year as
the productions are increasing cost of labours are also increasing. As
investing on a low-cost country would make easy set up businesses and foreign
government help would more as their also wants foreign investment more.  Moreover, foreign investment in low cost countries
would develop infrastructure and economy of that country. And every direct and
indirect parties will be eager to help the company.

In other hand
availability of resources is also an important factor. Even though is cost
being high getting all the resources from that country is very important. For
example, in Maldives, for the foreign investors they must import each and
everything from other countries which brings high cost for the investment even
for only shipping it costs a lot. For example, in Singapore, everything is
possible to get easily. Even for the transport logistics are easy in Singapore
as Singapore is one of the developed countries in the world. If to invest in
tourism sector it’s very important to get resources needed easily.

Moreover, to
maximise the profit also we could invest on foreign countries. But the success
in international business depends on the effectiveness of operational
strategies. When managing a multinational corporation, must align the
performance targets with the prevailing market realities and globalization trends
in different countries. It is important to rationalize the expectations and
harness the core competencies toward the pursuit of competitive advantage in
international markets (Cole, 2016).

 

 

 

 

 

 

 

 

 

 

 

 

3.Sources of
Information

Before
considering going with International Villa Hotels needs to do full research
study of those countries and markets in depth. At first Villa Hotels needs to
define the problem of doing the research, methods, create objectives, determine
the market structure which the company will be taking their product/service and
then determine and collect the relevant information needed for the research
through primary and secondary resources

Primary tools
are direct observation, interviews and observations. And for secondary
government statistics, published documents on internet and newspapers and
competitor’s websites and blogs.

At first Villa
hotels needs to send a team to Singapore and Bali for the direct observation by
attending travel and trade fairs and exhibitions held in these countries and
observe how culture works and attitude of the societies. Observation is the
best way of collecting primary data. Moreover, interviews do helps a lot too.
Interviews can be used to explore the views, experiences, beliefs and
motivations of individual participants (P. Gill, 2008). Villa Hotels team can
meet for interviews or by telephone with tourism related authorities to collect
and get knowledge of the industry in those countries.

For secondary
data’s government statistics is very helpful. To know the market trends,
customer’s needs, arrivals to the countries are important data’s for the
research. And by government stats would know the spending power and pattern of
the customers. And these data’s are most reliable and accurate data’s that can
be collected and most of the data’s are available in internet. And then
published news blogs and documents in internet and newspapers are also very
important. To get an idea and history of incidents and accomplishments can be
tracked down by these. Through these information’s Villa Hotels will be more
aware of current affairs of those countries. And moreover, competitors websites
and social media platforms will give an idea how they are marketing and what
the markets they are focusing and what the customers are expecting from those
countries.

 

 

 

4.Business area &
Impacts

Before investing
in a foreign market its very important to know the business etiquettes of the
international market, know the history of the foreign country’s currency value
fluctuations, foreign country laws and rules of the businesses and find out
what the competitors have done in the same territory.

As to invest,
Villa Hotels & Resorts choose to invest on Singapore and Bali. Now we look
on impacts on business by investing in Singapore and Bali. Only by analysing
Political situations, Economy, Legal system, Environment & Cultural
factors, Transportation, Technological & ICT infrastructure, Labour force,
Size and the scope of the market would let us know the impacts on the business
and feasibility to invest on Singapore or Bali tourism sector. Moreover, Villa
Hotels is more interested in to provide a medium level accommodations for the
travellers.

 

Going through
Travel & Tourism Competitiveness Report 2015 by World Economic Forum, top
five performers in Asia-Pacific are the most advanced developed economies:
Australia, Singapore, Hong Kong SAR and New Zealand. Singapore have been ranked
in 3 out of 141 countries in GDP per capita (World Economic Forum, 2015). And
Singapore is listed as 2nd   country that
encourages to Foreign Direct Investment. 
On overall ranking in the report Singapore is ranked in 11th with a
value of 4.86 (World Economic Forum, 2015). Yes, in Singapore, should pay more
than other places in Asia for everything but the quality of life in Singapore
is second to none. Its excellent business environment (1st) and high-quality
human resources (3rd) are extremely conducive to the development of its Travel
& Tourism industry, which is also a high national priority (4th). Singapore
has taken the necessary measures related to international openness (1st) to
ensure the seamless arrival of international visitors, and has strong ground
(2nd) and air (6th) transport infrastructure (World Economic Forum, 2015). The
country has experienced an increase in spending on sightseeing, entertainment
and gaming, and ranks top for entertainment in terms of online searches.
Similarly, to other advanced economies, however, Singapore is not a very
price-competitive destination (116th). It should also dedicate more efforts to
environmental sustainability (51st), notably high water stress (128th) and
damage to coastal ecosystems (Henderson, 2015).

Going through
Bali (Indonesia)  in Travel & Tourism
competitiveness report 2015 Indonesia ranked in 50 out of 141 countries.
Indonesia’s economy is on the rise and thus seeing the country take its
rightful position as a major destination for foreign direct investment (FDI).
In the report its ranked 132 out of 141 countries which is a huge concern. And
they have been ranked 38 in the transport infrastructure. And price
competitiveness its 3rd ranked country out of 141. And what other concern is
ICT readiness which is 85, comparing with Singapore those are huge
disadvantages.

The political
risk in Singapore is relatively low. According to the Political and Economic
Risk consultancy, Singapore is the lowest political risk in the Asia. It’s a
democratic country that people elects the representatives to lead the country.
Today due to this stability Singapore has changed to a peace and high standard
of living. And this attracted lots of investment around the world. But as
Singapore is also a democratic country the influence from Western Countries and
American’s will be high. People Action Party (PAP) rules the country and this country
is famous for its anti-corruption policies which also attracts foreign
investments (Ajmera, 2015). 

Indonesia has
undergone a political transformation since the upheaval of 1998 which saw the
fall of General Suharto after 30 years of authoritarian rule and a collapse of
the Rupiah. The country is now a vibrant democracy that is continuing to
strengthen its political structures and deepen the enfranchisement of the
population. Comparing with Political situation of both countries it seems that
both countries willing to protect the investors and welcome more investments.

Indonesia has
never impressed in the Annual Corruption Perceptions Index (by Transparency
International). This index indicates the level of political corruption in a
given country. Currently Indonesia’s ranks number 88 (out a total of 175
countries) but its performance has shown a steady improvement since the start
of Susilo Bambang Yudhoyono’s administration in 2004. This section provides a
detailed account on the past and present of corruption in Indonesia.

 

 

 

One other main
problem is the fear of terrorist attacks. As Singapore is a well-established
and developed economy, country is a target of the terrorist organization. These
are things needed to be consider before investing a foreign country.    

What worrying is
safety and security in Bali. following the 2002 bombing of a Kuta nightclub in
Bali was devised after the attack took place, which led to slow and laborious
recovery of tourist confidence and revenues after the 2002 Bali bombings,
around three-quarters of hotels dropped their prices, by an average of 37%.
Investing on Singapore will have positive impacts than bali if compared with
safety and  secutiry..

The government
is a major and active player in the economy, owning substantial productive
assets (land and capital). The government directs and targets the economy
through laws, regulations and incentives, and participates in business ventures
through Singapore’s unique hybrid, the government-linked company (GLC).

Constraints on
Singapore economy is shortage of labours, rising cost of labours, and declined
productivity of the country and competitiveness in Tourism sector is high.
Currency risk is also needed to be considered. There is a possibility that
investment might felt relative to US dollars, lowering the return after its
translated back to dollars. As in Singapore pricing competition is very low
this would create difficulties in selling products. Financial and Banking
system in Singapore is one the best around the globe. They follow high rules
and regulations in banking system. Comparing in Bali the cost of labours are
very low and resources are available at very cheap. there’s one central
problem: the value of the currency. The rupiah has lost 10% of its value
against the dollar since last year. And it’s a problem that is dogging
Indonesia, even while the country welcomes delegations from around the world to
the World Economic Forum and the president promises stronger growth.

After the
independence in1965, Singapore kept the British Legal System, although made
some modifications to suit the laws to Singapore. In Singapore, the penalty for
corruption is fining with USD100,000 or 5 years’ imprisonment or both. Due to
the growth of the electronic commerce it requires a transparent market
regulations and legislation. In Singapore, legal regulatory and business
environment required to support industry development and growth in economy.

Indonesia has
never impressed in the Annual Corruption Perceptions Index (by Transparency
International). This index indicates the level of political corruption in a
given country. Currently Indonesia’s ranks number 88 (out a total of 175
countries) but its performance has shown a steady improvement since the start
of Susilo Bambang Yudhoyono’s administration in 2004.

Comparing with
other Asian tourist cities like Hong Kong and Kuala Lumpur Singapore is a
tourist destination with relatively heavy tax. In addition to value-added tax,
it is necessary for tourists to pay extra 7 percent consumption tax and 10
percent service charge in restaurants. It is much higher than other tourists’
destinations. As well, the duty rebate policy in Singapore is less competitive.
It is a huge disadvantage for Singapore to develop trade retail industry. Most
tourists prefer shopping in a foreign country. For instance, it is well-known
that Chinese tourists are keen on buying luxurious brands, like Louis Vuitton,
Chanel and so forth. However, most of them choose to shop in Hong Kong where
tax is low, rather than Singapore. The Singapore government should review its
tax categories and amount for tourism economy to attract tourists whose main
travel purpose is shopping (BlaBla Writings, 2015).

Singapore is the
second dense population in the world with the population of 5.399 million in
2013 with different ethnic groups which is concentrated in the age of 15-64
years of 76.3% and follows 15.2% of 0-14 years and 8.5% of citizens over
65-year age. Due to the government, free educational programs the literacy rate
is 92.5% of the populations (UNWTO, 2010). This produces high quality workforce
and the labour cost goes high day by day. Moreover, the workforce should pay of
10% of salaries to the central provident fund for the retirement. Reports
suggest that most Singaporeans doesn’t like blue collar jobs like construction.

Indonesia has
witnessed sustained and structural outbursts of violence throughout its
history, but it seems justifiable to pose that the demise of the strong New
Order government in the late 1990s has enabled both ethnic and religious
violence to flare up in the regions because of the reduced role of the army in
Indonesian society.

Singapore has
been known as high dense pollution country especially air pollution. Singapore
is making effort in eliminating the air pollution by setting regulation and
standards of stringent emission, promotion of energy efficiency and introducing
natural energy. One of the main concern in Singapore is the country doesn’t
have enough water support for their needs.

In 2009,
Indonesia’s National Climate Change Council reported that the country was the
world’s third largest greenhouse emitter (Fogarty, 2009). Besides rainforests
and forest fires, the industry segment was also identified as a responsible
party in greenhouse gas emission in the Indonesian economy (Resosudarmo and
Irhamni, 2008)

Well in
Singapore too Internet plays a huge role in the advancement of the country. The
cost of and time of conducting businesses are lowered and social networking was
boosted while residents can connect easily with the rest of the world. Easy
accessible to the country and travel around the country made easier with the
high-speed rail way system and public transportations.

Singapore is one
the country who follows e-government. To save time and productivity everything
is connected through internet.  To be
investing in Singapore, a highly trained IT team would be needed. Meanwhile in
ICT Indonesia have been ranked very lower comparing to Singapore.

 

5.Recommendation &
Conclusion

After seeing the impacts, I
recommend investing Villa Hotels in Singapore. As Singapore’s corruption level
is very low. Resources are available easily. And Security wise Singapore have
been one of the safest place is Asia region. The disadvantage is high costs
involve directly and indirectly as the standard of living is so high in
Singapore. Moreover If invested in Indonesia the cost would be very low.

Villa Hotels needs to invest
abroad is that to diversify and maximise the profit. And its important to
choose cost effective country. Villa 
Hotels already holds 5 resorts in Maldives which are Paradise, Sun,
Holiday, Royal and Fun Island Resort. The best 2 countries to invest is
Singapore and Indonesia. But after reviewing all the impacts its better to
invest in Singapore.