Here the candidate should focus on the decreasing profit instead of only looking at the total revenue.
The region is not maximizing revenue and therefore also not maximizing profit.
As capacity is limited the region is getting less of a return on its limited resources.
For the government itself it is bad due to the fact that they mainly make money through taxes like VAT on services in the tourism sector. They are getting less money but having more people using public goods, such as public transport, roads, etc., which will lead to higher costs.
II. Market - Question 4
4. How could you measure the capacity on the market in this case?
There are many different capacities that can be measured:
Fixed capacity for handling flights at airports
Fixed capacity for handling ships at ports
Fixed capacity on roads and railroads
Capacity of hotel rooms
Space on beaches
Capacity of communal infrastructure (sewers, electricity, water)
Bottle neck capacity during peak seasons
Capacity bottle necks in accommodation are considered to be more severe than in one of the transport sectors or on the beach. Without available accommodation no additional tourists will come to the region.
II. Market - Question 5
5. What are the following figures telling you about the capacity of the region?
This shows that the region’s capacity during August is getting pretty stretched and that there may be some capacity issues in the peak season. The off-peak season on the other hand is notfully utilized and occupancy levels are even below the level of the competitor countries. This is partly due to the fact that there are no business activities in the region (conferences, etc.).
III. Capacity - Question 6
6. The government wants to invest in a new terminal for their airport in Malaga, the biggest city in the region. Please assess the feasibility of this plan.
Although total revenue is increasing, the number of tourists is increasing faster and therefore the average revenue from each tourist is decreasing.
To increase revenue the region has either to increase the averagerevenue from each tourist or increase the capacity in August.
Expanding capacity will take more time and will lead to a lower occupancy during the rest of the year (which is already only at 35%).
A better alternative would be to attract tourists in non-peak seasons. This solution has major cost advantages as it would take better advantage of the existing capacity. This could be done by introducing interesting opportunities for business activities as conferences or special programs for companies (team building).
Other possibilities would be to increase the average tourist spendings:
Charge more for current activities, increase the average number of paid or introduce more premium activities.
Attracting tourist segments that spend more money.
The decreasing revenue per tourist could be a sign of quality issues related to the capacity problem during peak-season, as it does not seem to attract high spending tourist segments.
Dealing with the airport’s capacity problem:
The new terminal will increase the capacity remarkably, but it is not clear if the future demand growth will reach such high limits. In addition the terminal is not fully utilized during off-peak season.
A cheaper solution could be to renovate the existing terminal or extend the working hours during peak season.
Also other possible bottlenecks at the airport (runways, gates, staff and flight restrictions during night time) should be checked before making a decision.
Möchtest Du dieses YouTube-Video sehen?
Ohne Dein Einverständnis können wir keine YouTube-Videos einbetten. Klicke auf den Button, um dem automatischen Einbetten von YouTube Videos zuzustimmen.
Mit Deiner Zustimmung willigst Du zugleich gem. Art. 49 Abs. 1 S. 1 lit. a DSGVO ein, dass Deine Daten in den USA verarbeitet werden. Die Datenschutzgesetzgebung in den USA wird nicht als angemessen angesehen. Daten können dort von Polizei und Geheimdiensten ohne vorherige öffentliche Gerichtsverhandlung eingefordert werden. Du kannst Deine Einwilligungen zur Einbindung externer Dienste jederzeit in unseren Cookie- und Privatsphäre-Einstellungen ändern.
Diese Webseite nutzt Cookies, um essenzielle Funktionen wie den User-Login und Sessions zur Verfügung zu stellen.
... (Mehr lesen)Wir nutzen zudem Cookies und Software von Dritten, um Dein Surf-Erlebnis auf preplounge.com zu verbessern. Du kannst entweder nur essenzielle Cookies oder alle Cookies akzeptieren. Du kannst Deine Einstellungen jederzeit in unseren Cookie- und Privatsphäre-Einstellungen ändern. Dieser Link ist im Footer unserer Seit zu finden. Wenn Du mehr Informationen benötigst, besuche bitte unsere Datenschutz-Erklärung.
Datenverarbeitung in den USA: Indem Du auf "Ich akzeptiere" klickst, willigst Du zugleich gem. Art. 49 Abs. 1 S. 1 lit. a DSGVO ein, dass Deine Daten in den USA verarbeitet werden. Die Datenschutzgesetzgebung in den USA wird nicht als angemessen angesehen. Mehr Informationen hierzu in den individuellen Einstellungen.
This case is made to be interviewer-led. Therefore the interviewer should guide the interviewee through the interview.
The case is split into two parts.
The first part describes more qualitative problems and has more open questions that should make the interviewee think about the problem and its solution.
The second part is more about quantitative problems and calculations. Here the interviewee should try to make his own calculations and solve the questions.
The questions in the big boxes should be read out and shared with the candidate.