Entrepreneurship Proposal Form
Mentor Marcus Stephenson
Please complete this form using the spaces provided, which indicate the required length of each section. This is your research proposal, and as such is an indication of what you intend to do for your dissertation, rather than a rigid plan. It is very likely that your final dissertation will vary from your initial proposal in some respects. However, the proposal is the first stage of your project, and an important starting point for your research and for your discussions with your supervisor. It will help you to plan your work and to focus on the purpose and structure of your final dissertation.
1) Proposed Title of Project (subject to change)
Launch of SABRE TRAVEL NETWORK in Kenya.
Sabre is to compete with existing GDS’s like Amadeus and Travelport in Kenya
2) Rationale for the Project: Provide a brief description of why you want to do this project and your specific suitability for doing it.
Personal Suitability:
I currently work for the revenue optimisation division of the Emirates Airline group, where I analyse markets and look for business opportunities across various markets.
Having over five years of experience in market setups such as; Senegal, Nepal and Afghanistan the main criteria for my role is to create an office set up was to allow customers to be able to have access to Emirates ticket inventories. The mandatory analysis in my role is to conduct primary and secondary research and understand travel agency trends and patterns. After my analysis I have to create a strategy of how to enter the market based on my findings.
Considering my experience, nationality and ability to analyse markets in detail, I am confident in playing on my experience and learning’s to develop a successful entrepreneurship in Kenya.
Why distribute SABRE?
CURRENT ISSUE
Currently most travel agents In Kenya use the GDS (Global Distribution System) through command entry method. This method has been adopted by the travel market for years; the main issue with this current method is that in today’s generation most people do not believe in memorizing scripts of entry. Students are more tech savvy and internet biased that they would rather understand what they are doing, instead of blindly typing in entries in an ordinary dull screen. The Sabre solution is the proposed system to take into Kenya, reason being is because not only is Sabre the world’s largest GDS but through its new innovation of Sabre Red, travel agents would now have the ability to use the system in graphical view (web search format) and command entry method.
PROPOSED SOLUTION
The graphical view feature can be well adapted by upcoming travel professionals of the younger generation, who depend on internet as not only a search tool but a way of life. The Sabre Red solution offers key benefits to the travel agent such as; fewer keystrokes, the system allows a point and click method which is a more advanced approach to memorizing script entries, faster training due to graphic and picture display and better service. The idea behind better service is to have an office set up in Nairobi where we can be closer to the local community and have the ability to interact with clients and build better successful relationships.
3) Summary/background information on industry/sector and organisation(s) concerned
Industry background
The GDS (Global Distribution System) was a method that allowed travel professionals to keep track of flight schedules, availability and prices. This concept was created in the 1960s and was known as the “dinosaurs’ of system technology as it was among the first e-commerce systems in the world that Business to Business electronic commerce.
Prior to the GDS, travel agents would spend numerous hours manually entering reservations and pricing itineraries which referred to the tariff books provided by ATPCO (Airline Tariff Publishing Company.) The airlines then realized if they automate the reservation process for travel agents through systems like the GDS, it would create another channel of sale by allowing airlines to be more visible and accessible by agents worldwide.
Just like how countries in the world operate today; the GDS industry also consists of super power GDS’s like Amadeus, Sabre and Travelport. These systems exist with roughly 480,000 travel agents worldwide, there are small country focused systems too like Infini which exists only in Japan or Abacus which exists in Asia/Pacific.
The GDS is one of the best-kept secrets in the travel industry. They are indispensable to travel. The GDS forms the backbone of computer reservations systems for travel agents, airlines, and more. The State of the art hardware and software allows their clients to easily provide instant and accurate services to the travelling public, resulting in millions of transactions taking place each day.
According to the Sabre website states – Travel and tourism is one of the largest industries which employs over 231 million people and generates more than 737 billion dollars a year in the US alone. Sabre travel network currently connects travel buyers and sellers to the world’s largest travel market place known as the Global Distribution System. The Sabre GDS fuels the travel industry by processing over a million transactions per minute during peak times.
For over ten years Amadeus and Galileo have dominated the Kenyan travel market by largely catering towards the hotel suppliers and travel agents, giving foreign travel agents an easy access to all the Kenyan content. According to a survey done by Marketresearch.com, the report mentions that the Kenya Ministry of Tourism in February 2012 saw tourist arrivals by air and sea grew by 15% over the full year to 1,265,136, up from the 1,095,842 arrivals in 2010. Tourist revenue figures, which rose by 32% year-on-year to KES98bn, mainly on the back of higher spending from Chinese, Indian and Emirati tourists.
Background on Sabre
According to the Sabre travel network company stats; the Sabre marketplace is used by approximately 350,000 agents in 130 countries, tens of millions of corporate travellers and hundreds of millions of consumers. Sabre links travel agencies and Travel Management companies with more than 400 airlines, 100,000 hotels, 25 car rental brands, 14 cruise lines — every type of travel supplier under the sun — enabling them to create unforgettable experiences for travellers.
An interesting fact on the Sabre website: “Our marketplace helps buyers shop, book and manage travel about 1 billion times each day — at times processing more than 60,000 requests every time your heart beats.”
Sabre presence in Africa
1. South Africa’s largest private airline – Comair Limited has chosen to work with Sabre in offering the lowest fares of its airline Kulula.com (4-traders, 2011)
2. Sabre signs a 20 year agreement with South African airways in providing exclusive content on Sabre for travel agents all around the world (Dooley, 2011)
3. Sabre joins forces with Rogers Aviation. Rogers Aviation is a leader in the African travel and has become a one-stop centre in Mauritius, South Africa, Reunion, Madagascar, Comores, Mayotte.
4. Sabre existence in Nigeria. According to Dr Anthony Kila, the chairman of Sabre Network West Africa, “This year, we have opened offices in Senegal and Cameroon. Everything is in place. Sabre Nigeria has about 15 markets yet to explore in West Africa, and if we are able to enter those markets, it means we are generating more wealth for our shareholders.”
4) Aims and objectives of the project and clear statement of the main problem or opportunity to be addressed by the project
Objective of Project
The main idea is to implement the Sabre GDS into the market for a maximum life span. Based on the costing calculation the investor will be able to breakeven and generate profit after the second year of implementation. Currently there are two dominant GDS systems available in Kenya; Galileo and Amadeus, the launch of Sabre will give Kenya a third option for accession travel content. Since Kenya is a country that depends on travel and tourism, the current stats proving the industry to be growing at an average of 8.33% a year.
N.A. (2012) Custom data reports. MIDT Analyzer. [Online] Available at: http://ma.aspirion.aero/midt Accessed on 17th April 2011
Problems and Opportunities to be addressed by the project
1) Office space:- preferably located near the airport area or a popular travel agent/ airline district
2) Internet connectivity/ telephone lines
3) Hardware/software to operate Sabre, Sabre is on online system so most travel users would just require an internet connection. Unlike Galileo or Amadeus where a pre-hardware system must be installed.
4) Legal contracts between travel agents and Sabre. To be provided by Sabre Network, similar templates are provided to all other Sabre distributors
5) Man power (5 staff):- two customer support staff to entertain agent queries, one sales person to visit travel agents on a daily basis to either sell the product or manage relationships, one product person to conduct product training and demos and an Admin/office manager to overlook, control daily operational issues and manage upper class relationships with Key travel agent owners.
Once the project is established and set up, it is proposed we keep Sabre in the market for a maximum life-span. The franchise contract last five years from launch date, this contract can be renewed based on proposal for continuous penetration in the market. Breakeven will only be achieved after two years of investment.
Based on market research in terms or expenses that will occur in Kenya for initial setup, salary expenses and other operational expenses, the total project investment will be 500,000 USD. Although, the investment appears steep break-even should be achieved within the first two years of launch and there on recurring annual profits of minimum values of 250,000+ USD for the investing partner.
5) Rationale for the methods used for data collection and analysis
1. Industry analysis – Porters Five Forces, SWOT and PESTLE
2. Questionnaire to be sent out into the market to at least 15/20 agents, to understand product need (research sampling)
3. MIDT analyser- system that allows tracking of current market stats in terms of bookings and segments between Distribution systems
4. Sales pipeline and launch plan
5. Strategy of implementation
6) The specific types of data to collect to be able to meet your project aims and objectives
1. Sales figures of ticketed segments of ALL GDSs in Kenya for the year 2011, to understand market share between rivals
2. Number of segments booked on each airline, to understand what are the common airlines we should partner with
3. Study of Airline trends in all East Africa to understand market power of Kenya. In terms of influence in East Africa volumes
4. Performance of actual Sabre figures from launch date (2011) in Mauritius and Sierra Leone. This data would give us an idea of what to expect when Sabre is launched in Kenya.
5. List of ALL agents in Kenya and their ticket segments for the year 2011. This list will help us categorise the importance of each agency and understand their booking capacity
6. Contact information for most agents in Kenya, this will enable me to contact agents and understand their demand for a new GDS
7. Use of other academic journals and travel magazines
7) Issues of reasonable access to the kinds of data and information you expect to need
1. Ability to conduct sampling in foreign soil
2. Ensuring travel agents will fill out the surveys will accurate information
3. Introduction to agents, how to meet and relationship building
8) How any data collected will be analysed
1. Vlook formulas and pivot tables to merge information and develop a analyses reports. These reports will allow me to understand: number of agents, booking patterns of agents on different GDS, top airlines booked by agents, top airlines used in East Africa which need to be available on Sabre.
2. The research and findings on the industry analyses will demonstrate an understanding to the travel and tourism industry in Kenya.
3. Questionnaires will be given out to at least fifteen agents given an opportunity to random sampling and understanding of current market demand,
9) Organisational and/or business barriers/problems that may occur, and how these may be overcome
Obtaining contracts with travel agents and penetrating into the market: –
At the initial phase before the launch we will have a survey sent out into the market, the information obtained from the agents will enable us to evaluate what are our key target agents. The agent community will be divided into three classes; CLASS A for top performing agents who issue over 15,000 segments a year, CLASS B agents who issue between 10,000 and 15,000 segments and CLASS C agents who issue up to 10,000 segments a year. Each class of agents will receive certain benefits such as hardware, Internet connectivity and incentives for booking on Sabre.
Manpower selection and training: –
Manpower will be recruited locally so they are equipped by local market knowledge, travel experience and current relations. Each employee will go through two weeks of training where they will be taught and guided through the Do’s and Don’ts of the product. The training will be conducted by the Sabre Travel Network team directly, as becoming their distributor for Kenya allows us certain perks in terms of increasing product expertise.
Franchise endorsement: –
Sabre will be paying 6USD for every segments generated in Kenya. The business model will be consisting for two earnings, revenue generated for the investor and personal revenue. Profits will be calculated monthly but distributed annually, where each member will be provided their earnings. At the break even stage through the project lifecycle, considerations in distributing profits monthly will be considered
10) The likely outcomes of your project. How your findings may be used by the organisation(s) and/or markets concerned.
1. Create awareness among travel suppliers about a new GDS
2. Create competition within the market
3. Increase jobs and income within the Kenyan economy
4. Develop and establish Sabre as a brand in Kenya which will later allow or give opportunity to increase distribution throughout East Africa
11) Plan or timetable: Show when you plan to complete each of the major elements of your project.
1. Finalise and discuss project and ideas before 31st May 2012
2. Complete Ent proposal form with details of Project end June 2012
3. Finalise and review research methodologies and sampling by mid Aug 2012
4. Research reports and materials needed to compile the dissertation by end Aug 2012
5. First draft of dissertation Mid Sept 2011
12) References: Please provide a complete list of all the references (if any) that you have used in writing your research proposal.
Abioye, O (2012) Punch Nigeria. Sabre plans expansion to more African countries. [Online] Available at : http://www.punchng.com/business/transport/sabre-plans-expansion-to-more-african-countries/ [Accessed on 3rd July 2012]
Anthes, G. Sidebar (2004) Sabre Timeline. Computerworld. [Online.] Available at: http://www.computerworld.com/managementtopics/management/project/story/0,10801,93453,00.html?from=story_package [Accessed on 1st July 2012]
Clayton, I (2007) GDS History. GDS, CRS and channel management. [Online.] Available at: http://tourismencyclopedia.pbworks.com/w/page/22387557/GDS%20History [Accessed on 1st July 2012]
Cohen, A. (2011) Sabre Enters South African Market. Business Travel News. [Online] http://www.businesstravelnews.com/article.aspx?id=20462&a=btn Accessed on 30th March 2012
Dooley, G. (2011) Travel Agent Central. Sabre and South African Airways sign pact. [Online] Available at: http://www.travelagentcentral.com/technology/sabre-and-south-african-airways-sign-pact-29525 [Accessed on 3rd July 2012]
Ferguson, M (2011) Sabre Travel Network enters South African Market. Worlds largest global distribution system targets travel agency growth. [Online] Available at: http://www.sabre-holdings.com/newsroom/release.php?id=2 [Accessed on 3rd July 2012]
Hymel, E.M. and Gattuso, J. L. (2003) Regulation in Brief #5: Computer Reservation Systems. The Heritage Foundation. Available at: http://www.heritage.org/Research/Regulation/regulation_brief111903.cfm [Accessed on 1st July 2012]
N.A (2012) Sabre Travel Network. Sabre Holding About us. [Online] Available at: http://www.sabretravelnetwork.com/home/about/ Accessed on 30th March 2012
N.A. (2012) Custom data reports. MIDT Analyzer. [Online] Available at: http://ma.aspirion.aero/midt Accessed on 17th April 2011
N.A (2012) Market Research. Kenya Tourism Report Q2 2012. [Online] Available at: http://www.marketresearch.com/Business-Monitor-International-v304/Kenya-Tourism-Q2-6855247/ [Accessed on 1st July 2012]
N.A (2011) Comair limited. Comair limited: South Arica’s largest private airline operator chooses Sabre Airline Solutions [Online] http://www.4-traders.com/COMAIR-LIMITED-6492574/news/Comair-Limited-Southern-Africa-s-largest-private-airline-operator-chooses-Sabre-Airline-Solutions-13811475/ [Accessed on 3rd July 2012]
