eco case studt 1

8/8/2019 Eco Case Studt 1

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NAME- ABUL HASHNATH

ID NO- I10006954

SUBJECT- BUSINESS ECONOMICS

SUBMISSION DATE- 12/11/2010


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Redang Island:

Malaysia is a country of natural beauty which attracts people so much. So that people from all

over the world come to Malaysia to visit and enjoy its beauty. There are lots of places to visit in

Malaysia like Langkawi, ganting highland, putra jaya, port Dickson, Redang Island many more.

Redang Island is one of the most beautiful places for visit. pulau Redang or Redang Island is one

of the premier Malaysian Marine Parks in Peninsular Malaysia, offering some of the best

snorkeling and diving due to its rich diversity of coral reefs and marine life. There are no bad

beaches in Redang. The beach is always find soft, fine white sand beneath your feet. Stormy

weather and strong waves can deposit debris and broken coral on the beach but over time, the

sandy beach is restored when new sand is deposited.

Overview:

Redang has a high biodiversity of marine life, offering 80% of species found in the 'coral

triangle' (an area bounded by the Philippines, Indonesia and Papua New Guinea known to have

the highest number of marine species in the world). There is no better way to experience the

marine life than to go diving. The accommodation on Redang range from budget resorts to 4 star

resorts. All are located at Teluk Kalong and Pasir Panjang on the eastern coast except for Berjaya

resort. All offer all-inclusive package holidays which include transfers, accommodation,

snorkeling trips & meal.


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There are currently 17 resorts on Redang Island which is describing below:

Resort Rates RM Rooms and facilities

Berjaya 1165/748* 220 rooms, swimming pool, ala-carte

restaurant, dive centre, gym, tennis, ballroom, conference hall, laundry,

sailing, wifi (in-room).Sari Pacifica 758 74 villas each with jacuzzi/soaking tub,

walk-in closets, LCD TV &entertainment system, swimming pool,

business centre, dive-centre, full spafacilities, complimentary wifi

Laguna 548 212 rooms, swimming pool, ala-carterestaurant, food court, dive centre,

indoor disco/karaoke, conferenceroom, gym, internet room, jacuzzi,

clinic, massage room.Coral 545 40 chalets & rooms, swimming pool,

ala-carte restaurant, dive centre.Beach 439 Chalets with attached bathroom, dive

and sea sports centreBay 398 76 rooms (24 chalet twin rooms, 2-

storey block with 25 family rooms (5-8

pax) and 27 quad rooms), swimmingpool, dive centre, conference hall, ala-

carte cafe, karaoke lounge.Holiday 379 24 semi-detached villas, 2 bungalow

units and an apartment block, divecentre. Photos Redang Holiday.

Kalong 379 38 rooms, 5-star PADI dive centre(Diver's Den).

Mutiara 379 Chalets with attached bathroom, diveand sea sports centre.

Wisana 360 4 bungalows (twin/triple sharing) and

1 Longhouse with 5 quad sharingrooms. Dive centre.

Reef 359 38 rooms, dive centre.

Pelangi 349 46 rooms (6 twin, 6 triple and 34quad), dive centre, beach disco, wifi

(guests only).


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Lagoon 335 30 rooms, dive centre.

AyuMayang 329 13 rooms. Dive centre at Redang

Pelangi.

Malaysia is recognized globally as one of the leading tourism destinations, ranking in the top 10

in arrivals and top 15 in global receipts. The tourism industry is also an important contributor to

Countries economy, generating RM36.9 billion in gross national income (GNI) in 2009. This

makes tourism the fifth largest industry in our economy after Oil, Gas and Energy, Financial

Services, Wholesale and Retail, and Palm Oil. By 2020, the tourism industry will contribute

RM103.6 billion in GNI, with arrivals increasing from 24 million in 2009 to 36 million in 2020.

Status of Malaysian Tourism Industry


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Over the past two decades Malaysia have managed to increase international arrivals from 7.4

million in 1990 to approximately 16 million in 2004 and to approximately 24 million in 2009.

The above graph is showing that the tourism sector has grown from RM30 billion in 2004 to

RM53 billion in 2009 a growth of 1.8 times (or 12 percent per annum from 2004 to 2009)

placing Malaysia 13th in terms of global tourist receipts. Only a few countries have been able to

sustain double-digit growth over such a long period of time, including Egypt, China and South

Africa.

Question 2:

Discuss the 5 factors that lead to the growth of the industry in Malaysia in the

context of Microeconomic studies

There are several factors which influences the economical growth of Malaysian Tourism sector.

Over the years Malaysia has attracted a lot of people and earned the tag of being a tourist county

as many tourist visits Malaysia annually. In the paragraphs below I am going to analyze few

factors which for lead to the growth of Malaysian Tourism.

Weather: A good weather has a lot of impacts in tourism. Tourists always looksforward to weather which is enjoyable and doesnt hamper their tour. Weather in

Malaysia attracts the tourists a lot as it is hot and humid throughout the year and

unpredicted rainfall at times which makes it pleasant. Mostly the tourists looks forward

to the sea sides such as Langkawi or Redang Island, as the weather there is very cool and

sunny which makes it perfect for visitors.

Cheap transportation: A decent amount of money is required if you are travelingsomewhere and at that time you want to save every cents. Tourists get attracted and

motivated to visit particular places when they see that the air, bus, train tickets are

available in a cheap price therefore cheap transportation is one of the key factor which

increases the growth of tourism industry.


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Raise of Income: When you earn a lot you are happy and when you are happy you wouldlove to visit somewhere with your family to spend some good time. Raise of income has

a lot of impact in the Malaysian Tourism sector as seen previously people often plans a

visit when their income rises because after the expenses and savings a holiday is worth it!

Packaged Holiday: Some people are fear visiting new places as they think about theydont know the location and the people. Packaged holidays have boosted the growth of

tourism not only in Malaysia but around the globe. Packaged holidays are hassle free as it

contains everything inside such as the accommodation, transport etc. So for resorts like

Redang Island they link together with the tourism agencies which help them to attract

more people towards the resort.

Advertisement: Creating awareness is vital and the current world is diverted towardsadvertisement as it is the best way to create awareness. Advertisements on television,

radio, newspaper etc is a successful medium to attract tourists to visit places. From my

personal experience as of being an International student I have seen a lot of

advertisements about Malaysian tourism back home and also seen people visiting the

country as the advertisements were eye catching therefore advertisement is one of the

major causes to influence the growth of Malaysian tourism.

Question 3:

Discuss the factors that such industry should look into to increase the revenue

in Malaysia.

International tourism is quite often the generator of international trade flows. Certain the

increasing quantity of business travel, particularly in a destination where the economy is greatly

driven by international business such as in Malaysia, international arrivals could be determined

by the level of business activities among the destination and its economic partners.

In this study, trade openness is included in this analysis because arrivals on business purposes


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Consistently made up about 11 percent on average of total arrivals to Malaysia in year 2006

(Tourism Statistics Update, 2007). For this reason, volume of trade is hypothesized to affect the

demand for travel to Malaysia and it was therefore contained in the model to help explain

demand.

Revenue is a meaning of price and total quantity; therefore, to increase revenue, price, quantity

or both must be altered. Therefore, I am going going to discuss how the factors of price and

quantity may be altered to achieve increase revenue in the tourism industry in Malaysia.

Price:

Price is very important for any kind of industry for the increase of revenue. Basically, there are

some possibilities on how price could be changed to increase revenue; it could be increased in a

market with a fairly inelastic or highly inelastic demand, it could be reduced in a market with

fairly elastic or highly elastic demand and lastly it could be left intact in a market with unitary

elastic demand since neither increase or decrease in price is going to increase revenue. In terms

of resort industry like in the off season most of the time price is low so tourist go there to visit

the place most of the time business people they go for tour and spend time with their family and

on the seasonal time resort owner they increase the price so that people all the level they cannot

visit only the people who have money they can go so that revenue also become limited so price

should be in reasonable so people from the all level can visit and revenue will also go high .

On price increase in the Consumer Price Index ratio would decrease tourist Arrivals in Malaysia.

In line with that, the CPI can be described as the pulling factor in attracting tourist to visit

Malaysia as it offers a lower cost of living, cheaper food, accommodation and transportation

cost. The CPI rate of Malaysia is also used as a variable to test the increase rate effect towards

tourism industry. Result revealed that an Increase of 1% in CPI of Malaysia has contributed to

the increase in the number of tourists arrival in Malaysia by5.366%. From this result, it could be

assumed that there will be high value in CPI in any developing country like Malaysia where the

government will spend more money on the development for better living condition and

encourage Tourism in the country. From the above discussionits clear that price is one of the

important factors which can influence the revenue of tourism in Malaysia.


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Price

d

P1 A

P2 B

d

0 Q1 Q2 Quantity

From the above graph we can see that in the seasonal time resort price was P1 and the quantity

demand was Q1 and the initial revenue was area OP1AQ1 and in the off season time resort

owner they reduce the price from P1 to P2 so that demand also increased and quantity of demand

raise to Q2 and initial revenue area become OP2BQ2. Therefore, the reduction in prices has

helped achieve the objective of increasing revenue as can be seen in the differences in the sizes

of the initial revenue area 0P1AQ1 and the new revenue area 0P2BQ2.

Quantity:

Quantity is the second important factor which can increase the revenue according to cournet

model there are two firms in the industry, the marginal cost will remain constant (and that rivals

will maintain the same level of production over time. This theory can be seen in graph below


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Above graph can be use for to explain the quantity of demand in the resort industry like when its

peak season that time price is high in the graph when price is P1 quantity of visitors in the resort

is Q1 and in the off season when price decrease quantity of visitors goes up to Q2 and in the peak

season total profit area in the graph is OP1Q1 and in the off season total area of profit in thegraph is OP2Q2 which is showing that price in P2 profit is higher than price P2.


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very important for the resort industry.

Positioning and Product Strategy:

Resort will be positioned as a new, beautifully landscaped, nature-filled, unique atmosphere

hotel with a bar lounge service that fits an adult "getaway" market niche. A full range of referral

services (i.e. restaurant recommendations, shopping, taxis, area attractions) will be made

available and tailored to the needs of the particular guest.

Business services range from room phones that are Internet jack ready and telephone answering

message service for each room to on-site fax services and meeting room space (lounge sitting

area and cabaret room).

Price-Matching Strategy

This is the most common strategy adopted by firms operating in imperfect markets where all

firms are price searchers with largely homogenous goods and where firms are mutually

dependent on each other. Because the pricing strategy of resort A will either increase or decrease

the demand for resort Bs product, it is critical for resort B to match its prices with that of resort

A to avoid losing its customers to firm A in an event of price reduction. This strategy is not

proactive but more like a follow-follow pricing model, where the firm just follows the lead of

others. Besides, it is only feasible for a firm who has the capacity to contend with a prolong

reduction in price by the market leader(s).

The strategies described above which one is more appropriate for the tourism industry its veryhard to say as tourism industry mainly depends on visitors if visitor is too much than profit will

be high or there is less visitor than profit will go down and customer they always look for that

what other people talk about. So that from the above strategies which described advertising is

one of the most important because advertising is all about promotion because if resorts owner

they can do proper marketing of their resort with details they will be successful to attract visitors


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so much so that they should advertise their product in newspapers, door to door leaflet,

magazine, television, because of that people can know about the resort about the facilities and

people will more come to visit the place which will help the company to increase the total

revenue.

Bibliography

http://www.referenceforbusiness.com/business-plans/Business-Plans-Volume-07/Hotel-Resort.html

http://www.tourism.gov.my/corporate/research.asp?page=facts_figures

http://geographyfieldwork.com/TourismGrowthCauses.htm

http://www.redang.org/resorts.htm

eco case studt 1

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