What research should I do?
Some people undertake more research into buying a new car than into buying a small business. While the barriers to entering the tourism industry are low, this doesn’t mean that it is low risk.
The need to obtain commercial finance for a business purchase usually forces the need to undertake research. However, the purchase of lower cost businesses and those being bought through a superannuation or redundancy payout often results in business buying decisions based on little more than emotion and gut-feel.
Many external factors affect the likely success of a tourism business. Holidays and short-break experiences are usually purchased out of a household’s discretionary income (ie after all the bills are paid) and so they are subject to a host of macro and micro economic factors. The types of holidays sought by people are also influenced by social attitudes, fashion and trends. You therefore need to understand what things affect and influence your proposed target market/s.
The basis of a successful tourism business is the matching of the product ‘offer’ (eg, the tour, the type of accommodation, the style of restaurant etc) to the particular needs and aspirations of the target market. You have a much better chance of success if you offer something that people want, rather than what you think they want.
Fortunately the tourism industry is blessed with a wealth of research material available at no or low cost to help you get to know your target market/s. Much of it is available on the internet. The ‘marketing segments’, ‘plans’ and ‘facts & figures’ sections of Tourism Victoria’s corporate website and the Decipher website are two good starting points. Other sources of free or low cost data include:
- Council Economic Development Units
- Regional Tourism Organisations
- Visitor Information Centre staff and surveys
- Local/ regional tourism studies/ strategies
- Tourism Australia research library (online)
- Other State/ Territory Tourism Organisation's research libraries (online)
- Tourism Research Australia
- Australian Bureau of Statistics
- Industry associations (you may need to be a member)
- Industry and professional journals
- Industry conferences and workshops (key presentations are often available online)
- Market research companies
- Tourism industry consultants
Module 1 in this series “Understanding Visitor Needs and Expectations” provides a good overview of the tools and techniques for tourism research
On a less formal basis, speak as much as possible to people already in your sector to gain a broad picture of the industry and to learn about localised conditions that could affect your operation. Try to gain first-hand experience of visitor needs by volunteering at the local information centre or working in a similar establishment for a number of months.
Test your ideas on people you meet and 'bounce' them off experts in the industry. You need to have a clear concept of your target market – from geographic and demographic factors, to personality and lifestyle characteristics. The more you can understand about the industry and the marketplace now will generally mean a faster route to viability.
Case Study (101kb): A new tourism business owner/ manager, who did a large amount of formal and informal research before opening their doors and whose business has since benefited from that early research work.