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TRVL 4160

Travel & Tourism Strategic Seminar

Case Study

The goal of this assessment is to determine your ability to think critically about a situation and develop a strategic plan for an emerging business in the travel and tourism industry. Given the facts below, you will create a strategic management briefing resulting in a recommendation to the company’s senior leadership team that provides a new strategic initiative aimed at growing the current business. Your strategic plan should take into account the following:

• External Assessment
• Competition Review
• Internal Assessment
• Growth Opportunities Brainstorm
• Strategic Direction Selection
• Implementation Plans
• Evaluation for Success

Company Background

Lavin Adventures (LavAd) is an upstart Adventure Travel company specializing in mid-level, socially conscious, excursions to a variety of locations around the world. Going into their 5th year of business, LavAd has seen significant growth but is still trailing well behind its competition in terms of destinations offered and diversity of itineraries offered. Backed by a single wealthy investor and coffee influencer, LavAd has a strong financial statement, despite not yet reaching the break even point in their business life cycle. In each of the past years of business, LavAd has been operating at a loss, but the leadership team believes that this will be the year when LavAd finally reaches a positive cash flow as a business.

LavAd is uniquely positioned within the business landscape as the entire company is virtual, centralized on a robust website that offers interested travelers the opportunity to build and customize personal itineraries to a variety of locations. Due to the virtual nature of this business concept, outstanding customer service is a primary driver of LavAd, as such, a team of 24/7 customer service representatives are available to curate experiences for customers. Essentially, think of LavAd as the Trunk Club or Stitch Fix of the Travel industry. An interested customer logs onto the site, reviews the highlights of the offerings, then works directly with a live travel expert to build their experience. This process can be booked immediately or can be developed over a series of meetings with the client in which every detail of the trip can be custom built. LavAd’s dedicated customer service reps are available over a myriad of communication streams – email, text, social, skype and video conference, etc. – and are each highly educated and dedicated to providing the best possible value to their customer through a tailored experience. This high touch, yet convenient sales process has produced outstanding customer service scores and built relationships with customers resulting in repeat bookings despite such a short company history.

Currently, LavAd is operating as a niche travel provider offering itineraries to the following locations:

• Ethiopia
• Costa Rica
• Jamaica
• Guatemala
• Vanuatu
• Indonesia

Each location offers travelers an immersive experience into coffee culture and production. Itineraries are rooted in adventure travel highlighting all of the traditional elements of the segment along with a caffeinated tie in. Travelers can experience coffee like they never have before – participation in ceremonial coffee services, visiting and working on a coffee plantation, traditional coffee pairings with meals, and unique uses and processes surrounding coffee in each location. Itineraries can range from 5-14 days within a country and often feature multiple coffee related elements in addition to hiking, biking, adventure sports, sightseeing, dining, and more. In addition to showcasing coffee culture to travelers, LavAd trips also educate adventures on the economic ecosystem of coffee and it’s importance to the destination. Each LavAd trip contributes 5% back to the destination visited to advance coffee related business within the country and distribution of beans throughout the world. To date, LavAd has contributed over $1.5 million dollars to small, family owed coffee plantations and businesses in the destinations they serve.

LavAd’s trip pricing ranges from $3,000 – $15,000 depending on length of trip, level of service, level of activities, and depth of cultural immersion. The average LavAd trip booked costs $5400 per person for a 7-day trip. Currently, the most popular destinations are Costa Rica and Guatemala although recently the company has noticed an up-tick demand for Indonesia and Vanuatu. Average age of participant is 33 years old and LavAd has almost a 50/50 split of male to female customers. Currently, 87% of all LavAd customers are originating in the United States. Competitive intelligence shows that LavAd is currently the only company offering travel solutions that provide sustainable adventure combined with an immersive coffee experience.

LavAd is currently marketing their adventures through social influence on Facebook and Instagram, along with Google AdWords to drive traffic to their website. In addition, LavAd secured a strategic partnership with Starbucks in 2018 where the trips are advertised on packages of 1lb whole bean coffee that correspond to the itinerary locations. Starbucks offers space for free to LavAd for a profit share of 2% back to the coffee giant and a requirement that, when possible, a plantation that provides coffee to Starbucks in included in the trip. This strategy aligns perfectly with the support that Starbucks is already offering to these businesses around the globe. Upon launching this partnership LavAd booked itineraries skyrocketed to $1.4 Million in annual revenue for the past 2 fiscal years.

LavAd currently employs 50 full time associates, located 100% remotely, mostly assigned to customer service, itinerary development, and information technologies. In addition, LavAd has a small team dedicated to destination relations whose primary focus is to find new coffee locations and build relationships within the location to create a viable trip itinerary. LavAd currently does not have a physical corporate office. LavAd’s Mission Statement is as follows:

“Providing high energy, Java fueled, socially conscious travel to coffee connoisseurs around the world.”

Expenses as they relate to the company are totaling $10.2 million annually. The majority of this expense lays in product development, website maintenance and growth, and expense related to customer service personnel. LavAd is currently a private company and funded by a $40 million dollar investment to offset expenses for the next 4 years at which time, LavAd needs to become a stand-alone company that is operating off revenue provided from sales. To achieve annual profits of $10 million plus, LavAd needs to strategically scale their operations, review pricing, and develop a plan to jumpstart stalling revenue streams while maintaining company integrity. LavAd’s main strategic vision is to develop the company to be a competitive adventure travel brand that practices sustainable tourism and continues to help developing communities around the globe.

Based on this information, conduct research and respond to the following:

External Assessment

• Assess the demand for this type of company
• Assess trends in the coffee industry to find new possible business angles
• What other similar products could result in a packaged travel opportunity?
• What, if any, business trends would effect a business like this?
• Who are the main competitors and why?
• Assess the current product offerings, marketing strategy, strategic partnerships, company set-up
• Identify gaps and areas of improvement for LavAd
• Based on your research, offer a minimum of 3 growth opportunities that align with LavAd as a company (feel free to offer more!)
• Select the recommended strategic growth opportunity and explain why this is the best business option for LavAd
• Be specific!

Competition Review

• What other similar products could result in a packaged travel opportunity?
• What, if any, business trends would effect a business like this?
• Who are the main competitors and why?

Internal Assessment

• Assess the current product offerings, marketing strategy, strategic partnerships, company set-up
• Identify gaps and areas of improvement for LavAd

Growth Opportunities Brainstorm

• Based on your research, offer a minimum of 3 growth opportunities that align with LavAd as a company (feel free to offer more!

Strategic Direction Selection

• Select the recommended strategic growth opportunity and explain why this is the best business option for LavAd
• Be specific!

Implementation Plans

• How will your recommendation be implemented?
• Consider all stakeholders within the case

Evaluation for Success

• How will the compnay measure success?
• What adjustments will be made if goals are not met?

Your strategic plan should be typed in a Word document. You should cover each section of the above listed outline, a successful plan will clearly define a strategic direction and recommendation based in facts, not opinions, from start to finish. Using MLA, cite all outside sources used in your submission and be as specific as possible.

**As a note, given the fictitious nature of this case, it is acceptable to draw reasonable assumptions about the business, its practices, and the overall environment they operate in.**