TOPSIM - Destinations Management

Destination Alpenort

The Official Flyer

Destination: Alpenort, Schngau The valley of Alpenort is located in the Alps at approx. 1,450 meters above sea level. Embedded in an idyllic landscape, Alpenort is the perfect starting point for an enjoyable vacation or for any important meetings. Our range of services includes a number of sport options, suitable for the more active minded, as well as a number of options to relax. Thus we cater for all ages and even offer a diversified family program. The hotel industry in Alpenort is well-known for its diversity; each guest will find accommodation to suit his/her own personal needs. Common to all is the consistent focus of services based on the desires of our guests. Alpenort in the summer The area around Spiegelsee is a dream for hikers and bikers, as well as for those in search of relaxation. Enjoy this adventure from the top of our peaks! Whether you decide to use one of our two very comfortable and modern cable cars (Martinus Cable Car and Perrot Cable Car) or simply go by foot, you will surely be elated by the landscape and the cosy sun terrace! Alpenort in the winter Our valley provides the ideal surrounding for families, snow sport freaks and pleasure-seekers. We offer over 120 km of groomed slopes and 60km of cross country ski runs for fantastic downhill skiing and cross country skiing. Ski lifts, chair lifts and gondolas transport you throughout our superb slopes and cross country area. Whats more, our great suspension railways provide a free ride in paradise. The Destination Management Organisation, together with our local sport service providers, has a wide range of adventurous attractions just waiting for you.

We look forward to your visit in the beautiful location of Alpenort!

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Characteristics of Destination Alpenort

Alpenort is simply described as a pearl of nature by those who have been there before. From a historical standpoint, the sun terrace of Schngau played no specific role. In particular no fights took place and no guns were loaded on the former market square of Alpenort, which is adorned in by the local flower exhibition during the summer months. Fortunately, one could also say. Because otherwise the many stately built houses in diverse architectural styles in the winding alleyways could not be adequately appreciated today. Even the medieval Susegg Bridge in its fortified construction, which connects the old village center to the new district, has been almost completely preserved. The Alpine village lines up seamlessly with its beautiful churches, such as the Prngli Chapel on the small picturesque hill at the southern end of the village. The 3,200 inhabitants of Alpenort feel at ease, embedded in this atmosphere in the picturesque panorama of Schngau. You can also thank its location, directly on the Spiegelsee (Mirror Lake) for attracting many of its most famous honorary citizens. Poets and intellectuals found their way to Alpenort and have been inspired by it. When Spiegelsee lives up to its name and paints the panorama of the Varon mountain chain in bright colours on its surface in the setting sun, you could still spot one of the last Alpine crested newts near the lakeshore. In the summer nightsin Alpenort, those who are interested can hear the loud chattering of the endangered corncrake in the adjacent nature reserve. For flora and fauna lovers of the Alpine region, beautiful Alpenort offers a diverse repertoire in every respect and also does not shy away from comparing itself to much more famous destinations and tourist magnets in the Alpine region. The Alpenort hotel industry has been family run for long and has been working at a satisfactory level in recent years. The regulars know how to appreciate the customer orientation of the hotels and restaurants, the sport and event service providers, and the cable cars of this location, although they often mention the rather stagnating development of Alpenort. Through the globalisation of tourism, Alpenort now has a great opportunity to attract new, international tourists. Competition for guests, particularly from overseas, is continuing to grow. One destination in the Alps competes with holiday and recreation destinations around the globe for guests all over the world in the 21st century. These guests now also consider the Alpine region as a holiday destination. Thus, it is up to Alpenort to represent itself as an attractive yearround destination. In addition, the attractiveness of the summer season is playing an increasingly crucial role for Alpenort, say industry experts. Alpenort in the summer and in the winter Sports and recreation activities are offered year round for every age, whereas all the necessary service providers reside in Alpenort. The Destination Management Organisation is thus encouraging community members and service providers to better use the potential of this beautiful region, not least due to the diverse events available in Alpenort in both seasons. The possibilities are numerous, and only the future will tell just how the participants will take advantage of these options to position Alpenort as a destination competing for guests from all over the world. The starting point for many activities are the two cable car companies (Martinus Cable Car and Perrot Cable Car) (elevation: 1,450 m 2,700 m), which also provide the 120 km network of skiing slopes. From here the moutaineers and those seeking relaxation can choose from a diverse range of activities in the summer as well as in the winter.

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Winter season The mountains around Alpenort are a popular sports area in the winter. However, over the past few years the snow conditions in Alpenort have varied a great deal. The 60 km long cross country skiing network in Sennle Valley, with the 2,100 m high Juliushorn peak soaring above it on the eastern side, is in very good condition and is regularly used. The over 120 km long network of ski slopes with all levels of difficulty offers fun and diversification for experts and aficionados at every level. In addition, the Destination Management Organisation and our local sport service provider have a wide range of adventurous attractions waiting for you. Whether you are interested in snowboarding, downhill skiing, cross country skiing or sledding, in the winter there are a variety of options in Alpenort which make this beautiful village in Schngau very appealing to tourists. In addition, numerous events offer further entertainment options for the guests. Summer season Once the summer has found its way into Alpenort, the valley appears to be born again. Within a few days and weeks, flora and fauna awaken to new life. The meadows around Spiegelsee are transformed into a flourishing sea of colour, and the animals awaken from their winter sleep. For all hikers, bikers and recreation seekers, who would like to discover nature on their own, the summer in Alpenort offers the best opportunity for this on the approx. 120 km of excellent hiking trails. The longer the days are, the greater the pleasure amid the magnificent scenery while relaxing on the sun terraces. Today the summer season contributes substantially to the attractiveness, the popularity and the profitability throughout the year in Alpenort. Thus, it is important that Alpenort, aside from the winter season, can also actively position itself in the summer as an attractive destination.

Prospects for Alpenort

The residents of Alpenort all know and greet one another and are thus very familiar with the situation in the valley. The Destination Management Organisation, the sport and event service providers, hotels and cable car companies all survive based on the status of the location. But a destination in an industry which has inexorably progressed by leaps and bounds into the 21st century, cannot survive from its beauty alone. This view is supported by experts from the institute of market-based tourism research who say in this way it will be impossible to grow profitably and stay healthy. Without clear direction and a future-oriented use of all possibilities for a destination, says industry expert Dr. Harald Kaemmerer, over time even the most beautiful pearl will begin to lose some of its shine. Alpenort and its service providers already today have tough competition in the Alps as it attempts to attract national guests, guests from Europe and increasingly also those from overseas. Most other destinations have already been proactive here. To successfully contend that the Alpine region is a year-round attractive tourism destination, Alpenort will need to target its marketing efforts as such, as well as the individual service providers themselves. This is in the interest of all community members and the region as a whole.

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Due to its location at an altitude of just below 1,500 m, Alpenort does not have completely reliable snow conditions during the winter months; indeed recent years have painted an uncertain picture with regard to adequate snowfall. Since the snow line continues to become higher. Primarily due to climate change, those regions that usually have enough snow for winter sports will have more difficulty in the future. In order not to lose the high sales volume that tourism brings in the winter season, many communities are now investing in equipment which can produce artificial snow in order to ensure an adequate supply of snow, even when there is a lack of real snow. The mere 6 km of snow cover thus far (out of 120 km) on the ski slope network will not be able to meet the demands of the skiers and snowboarders of tomorrow. Despite Alpenorts ideal location, and the fact that its residents are all satisfied, to a large extent, with the tourist activities at the destination, there is still a need for action. Todays existing access to the traffic infrastructure of the destination of Schngau was planned and implemented a good 20 years ago. However, due to the anticipatory planning methods and crucial improvements along with the aid of federal funding for tourism infrastructure, it is able to withstand the growing tourist flow. Local transportation in Alpenort is used by approximately one quarter of all the guests for travel to and from the cable cars, visiting the location, or after a long day of skiing to simply find a less complicated way to the right hotel.

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Map of Destination Alpenort

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Email from the Outgoing Director

From: Fritz .P. Rotter To: Mailing List Alpenort All Subject: Challenges of the future

Dear co-workers, Thank you very much for the wonderful farewell wish as I entre retirement! Today, during my last day in office, I would like to use the opportunity to address everyone who in recent years has made Alpenort what it is today: a destination with excellent prospects. The backbone of our destination is not only our commitment to the hotel industry, but also the sport and event service providers, and last but not least, the cable car companies (Martinus Cable Car and Perrot Cable Car). The Destination Management Organisation can only supplement what these service providers have achieved through their marketing promotions. As you all know, the most important service providers in Alpenort are currently in the middle of a generational change. This is a good thing as we, in Destination Management, are now faced with new challenges, which we can only cope with if we have new ideas. Alpenort has already come a long way. Some facilities have been modernized and adapted to the needs of tourism in the 21st century. But some tough choices still have to be made. Whether it wants to or not, Alpenort is also competing with other travel destinations, in particular of course with the other destinations in the Alpine region, and some of them have already been clearly positioned as our destination. It is unfortunately not enough to assume that Alpenort is blessed with natural beauty for eternity and can simply take care of things on its own.w At this point I would first like to explain my recommendations for the next steps which will be necessary. However, I would probably only have contradicted myself with my wish for fresh impulse and new ideas. Therefore, I would like to set you on your way with a few questions to consider: - Do we have a clear idea of what distinguishes Alpenort from other destinations? - What target groups do we want to address more intensely? - What can we do in order to better concentrate all of our individual efforts? I am sure that the new generation in their management functions will find the appropriate answers to these questions and meet the challenges of tomorrow. I wish Alpenort and all those who work with and for this wonderful destination every success! Sincerely yours, Fritz P. Rotter -----------------Fritz Paul Rotter, Tourism Director Alpenort

This message (together with any possible attachments) may contain confidential or legally protected data or information. The message is solely intended for the person(s) mentioned in the address line above. If you have received this message by mistake, please be so kind and delete it to exclude any further reproduction of the same and notify the sending party immediately. Thank you very much!

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The Simulation Destination Management

The Idea
The basic idea of the Destination Management simulation is: Learning business by doing business. Your decisions as a participant determine the market. There are no preset or random results. In the Destination Management simulation you will thus assume the role of a cable car company manager, the managing director of a sport and event service provider, a hotel manager or possibly the role of a tourism director. In doing so, you will have the opportunity to influence and control the development of your actively simulated Organisation. At the same time you will actively shape the future of the overall destination. In a one-to-three day seminar you will have the chance to go through several fiscal years, to develop strategies, and to lead your Organisation and destination to success in the competition. One simulation period is thus comprised of 12 months, which corresponds to a business year. The summer and winter seasons are to be planned independently and decisions for each 6month period should be made; thus the two seasons are considered to be separate products. These individual products and services should also then be marketed independently. This is done against the background that customers often react not only to the components of the individual service providers, but instead frequently perceive the service offer of the whole destination as an overall product. A key process is the communication between the individual service providers, which is coordinated in its institutionalized form through the Board of the Tourism Association. The objective of the negotiations is to prepare a common strategy for the overall destination and thus consider the individual interests of the relevant stakeholders. Coordinated decisions are a clear advantage for the destination as a whole in the longer term. An essential aspect of modern destination marketing is the development of long-term destination goals and strategies. Only in this way can marketing activities be effective. These activities are aimed at segments or target groups in the relevant market. The Alpenort Destination Management Organisation has prepared a concept in collaboration with the Institute of Tourism and Economics which subdivides the guests in Alpenort into five target groups to support this approach.

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These Target Groups are Families, Silver Agers, DINKS + Singles, Young & Wild, and Seminar/Incentive Guests. For a detailed view, you can request the information brochures from the Destination Management Organisation (available through your instructor). The target groups distinguish themselves between their importance for the summer and winter season. Furthermore, a distinction is made between day tourists and overnight tourists. The target groups use the offers of the various service providers of the destination in very different intensities, so that adjustments in addressing the target groups can have a significant effect on the demand for certain services. The individual groups also have a mutual influence on one another. For example, the Young & Wild have a rather repulsive effect on the Silver Agers. Furthermore, the guests are also distinguished by region. Distinctions are made among the following three regions: National Europe and Overseas The guests who have travelled a great distance before arriving at the destination will on the average be staying more nights than those guests who live in Switzerland. Projects At certain times during the course of the simulation, the individual representatives of the service providers have the possibility in addition to operative decisions of making rather strategic project decisions. For the implementation of projects, aside from non-recurring costs, costs will also be incurred during the period in which the project is being carried out, depending on the follow-up costs of the project, which might be incurred in the following periods as indicated in the project description. The projects of the service providers serve to position the company with respect to competitors within the destination. They have an effect on the target groups and an impact in their totality on the destination performance. The most important indicator for the destination performance is the attractiveness of the destination. In addition, projects will be carried out for the destination as a whole. The board of the tourism association decides on these projects commensurate with their scheduled board meetings. The projects serve to directly position the destination and have an effect on their performance. The reporting system will be supplemented by a corresponding analysis of the project results beginning in the period in which the project was selected. Goal conflicts may occur when making project decisions. On the one hand among the individual service providers and on the other hand also among new alternatives as well as already selected projects. In addition, some projects have a stronger effect on the summer season and others a stronger effect on the winter season. This way it will become clear as to which corporate policy decisions are to be made and how they are classified in the destination as a system. However, the ideal project cannot always be consistently pursued. Just like in reality, external or internal limitations and adjustments to decisions may be required. For a detailed view, you can request

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the project file of Obermaier and Partners consulting company (available through your instructor). Aside from the active seminar participants who represent the service providers, you will also find a residual market within the Alpenort destination. This residual market is shown in the reporting system. The entire Alpenort destination is measured via a benchmarking of the most important indicators/ratios which are then compared to other destinations in the Alps. What goals should be achieved with the service providers? This question is not so easy to answer. On the one hand, because the goals of the individual service providers can differ and at the same time the development of the destination as a whole should be assessed. On the other hand one could draft up precisely the goals that should be achieved, which you yourself have set. Put another way, an adequate method of determining the goals to develop is in itself one of the goals to be achieved. Nevertheless, there are some variables to guide you. First, the indicator Attractiveness of the Destination was mentioned. The attractiveness of the destination is such a significant variable, because it is in turn comprised of variables which describe in a few factors the perceived performance of the individual service providers. These include above all the customer satisfaction indicators of the individual service providers. The Attractiveness of the Destination expressed in an Attractiveness Index (from 0 unattractive to 5 very attractive) provides the participants with information at a glance on the development of the destination. This does not mean, however, that it is the sole criterion for success. Aside from this indicator, additional output variables come into play, which serve to measure and assess the overall development. Only a comprehensive view of the key ratios of the individual service providers produces and an overall picture in the analysis of the developments. For the individual service providers, these are the previously designated Customer Satisfaction together with, of course, the relevant business economic variables such as e.g. Profit, Share Price and Return on Sales. Capacity management certainly has a major influence on the service providers in the destination. As in reality, this is directly controllable only in part, for example, by expanding the lift capacity of the cable cars. Otherwise, it is the result of the marketing decisions made and their effects on the market share, target group composition and thus the usage behaviour. The effects of these components must be anticipated early enough by the participants. For example, should an economic boom be expected, additional capacities can be acquired or the price can be increased. If the players assess the situation inaccurately, this will either lead to overcapacities being carried into the next period and margins being reduced, or potential customers may drift to the destinations of your competitors. Most of the variables have a certain persistency effect, which continues in the following periods. This means that if a higher market share were achieved in the last period, for example, it would then lead to positive effects in the following period, even if the special decisions show a decline. In other words, both positive and negative developments in the development of the market share have a certain dynamic of their own, which is effective in the medium term. Similarly, the level of attractiveness of the overall destination is effectively reached in the previous period or season. Here, however, we are talking not so much about persistence, but much more about a delay in time. Of course, even in the current period decisions made by the service providers for the booking behaviour of the customer are responsible, but the image and the attractiveness of the destination are sustainable here and have a certain delay. Thus, from a business point of view it may be, for example, that your company has had an excellent season, if high capacity utilisation figures or occupancy figures are combined with a low service level and little investment. However, the consequences of such a policy then have an effect on the next season and on the season after that, if word of the diminished attractiveness has gotten around and has significantly reduced the positive image.

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Fig.: Illustration of the Factors Influencing the Target Variable Attractiveness of the Destination The figure illustrates once again the importance of the attractiveness of the destination shaped by various factors which are influenced by the service providers. In the reporting system that you will receive at the beginning of the simulation, this attractiveness will be measured in the form of an index which can reach values from 0 (unattractive) to 5 (very attractive). Customer satisfaction, which you have achieved with the offer of your service providers, is also expressed with such an index. So what is your mission? You will be responsible for a service provider in the destination. First, you must secure its sustainable profitability, and thus the existence of the company. So keep in mind who your stakeholders are and for whom you are providing your services. An elementary component of the idea is the layered interdependence of the different areas of the service providers themselves, and with the destination. The economically tough budget competition within the destination in the Alpine region, as well as courting for the favour of guests from all over the world, is a part of daily business. This requires wise and thorougly prepared decisions: on the part of the individual service providers as well as on the part of the community as a whole in the destination. Always keep in mind that you will not make your decisions in a vacuum, but in a complex and multifaceted competitive situation:

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1. The interests of the respective service providers with respect to your stakeholders within the destination can obviously differ: If, e.g. a service provider prefers and solicits the target group Families, another however the target group Incentive/Seminar Guests, there may be a conflict of interest, since seminar guests usually prefer a quieter meeting atmosphere without the disturbing noises of children. Less apparent may be the divergence of interests among the service providers, if the same factor, e.g. Season Duration has varying directional effects on the service provider. For example, a long winter season usually means more business for the hotel industry, since more nights are able to be booked. But at the same time, if the snow reliability conditions in the destination are relatively low due to the extended season, this may not be in the best interest of the other service providers. 2. Each service provider must hold his ground against the rest of the market in the abstract budget competition, i.e. comparable service providers in the rest of the Alpine region: your guests are intelligent decision makers and are interested in getting the best possible service for their money in the Alps. Your potential guests will of course consider the overall attractiveness of destination Alpenort compared to the entire market in the Alps before selecting their holiday destination or venue. In addition, decisions as to where the much-valued holiday will be enjoyed, or where the venue should take place, and by which service providers the guest would like to have his or her accommodation organized and to what extent, will all have to be made. All of these will of course be influenced by the performance of the individual service providers as well. As a service provider, your task will be to create a profile yourself by making entrepreneurial decisions such as e.g. price setting, service quality, investments, if necessary, etc. This allows you to highlight your services and market yourself attractively to your potential guests in comparison to the so-called Residual Market of the Alps. You can thus cut your own slice of the pie out of the overall market. You therefore work in direct competition with the service providers in Alpenort and indirectly with the entire Alpine region. Through targeted and prudent business decisions regarding the destination, you have also managed to successfully satisfy the individual interests of the company. 3. The objective of the destination as such is, in coordination with other service providers in Alpenort and the Destination Management Organisation, to succeed collectively and to increase the attractiveness. In meetings of the Tourism Association, you jointly make decisions on projects which are carried out at the level of the destination; thus responsibility is mutually shouldered. In addition, these meetings provide the institutional framework for exchanges on issues which affect all service providers. So it is in your hands to make the right decisions during the often hectic daily business. Take the opportunity and set the right strategic course. As you strive for the best possible results, do not lose sight of the impact that these results will have on the destination as a whole. By studying this manual you will already be laying the foundation stone for a better understanding of the effects in cooperation with the stakeholders in this destination. After each round of decisions, you can estimate the effects of your entrepreneurial activities based on the evaluations. The dialog with your team members will result in different interpretations of the analysis. By exchanging information with other service providers, you will succeed in pooling resources for the destination. Your task will be complete only after the successful management of your service providers has been lined up with the successful development of the entire destination.

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Destination Alpenort
The following groups are modelled as service providers in the destination: 2 Hotels (3 Stars) 2 Cable Car Companies 1 Destination Management Organisation. Groups that are not actively simulated are stored with realistic and neutrally organized standard values in the simulation. The spheres of influence, in terms of direct decisions which have to be made, are illustrated on the following pages. Only the project decisions are not described here; you will receive more detailed information during the course of the seminar.

Hotels, 3 Stars
The market model of the hotel industry is classified into three segments: new customers, regular customers and allotments (bulk buyers). Decisions from the marketing mix have different impacts on all three segments. Regular customers are specifically addressed via CRM measures, while new customers are primarily addressed through direct mail. This means that target group specific marketing measures have to be applied. The marketing effect can be intensified through attractive project decisions. Furthermore, the market share is influenced by the length of the season. The main service provided by the hotels is lodging. The business divisions Restoration and Other Services depend to a large extent on this service. The hotels already have an enlarged restaurant area as well as an expanded and equipped seminar area. The wellness area is only in a rudimentary condition. The premises have already been expanded; however, only a small sauna area is available to date as a wellness offer for the guests. Summary of the Initial Situation for the Hotels The hotels have a bed capacity of 100 beds, of which 75% are actually occupied in the winter and 50% in the summer. This corresponds to over 13,000 overnight stays in the business year just completed. An occupancy rate of more than 50% is a medium to long-term economic benchmark, which positively supports the profitability of the hotel; an occupancy rate of 85% or more is excellent. Last year a turnover of about 2 million CHF was realized, from which a period surplus of 125,000 CHF could be achieved. With approximately 38% of the sales turnover personnel costs is by far the largest cost pool. Further details are included in the reports which you will receive at the beginning of the seminar.

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Cable Car Companies

This service provider serves as a tourist magnet for the entire destination. In general, guests are mainly attracted by the specific profile which the destination achieves through the offers of its cable car companies (Martinus Cable Car and Perrot Cable Car). However, the actual usage of these service providers, including the frequency and number of visits by different target groups, is essentially determined by their pricing. This is why prices and discounts of the cable cars have an indirect effect on the whole destination, too. They co-determine the composition of the target groups (due to their different usage patterns with regards to the cable cars) in the destination as they are the flagship of the destination. In addition to the core business, there are also influence factors on the actual available lift capacity. A lift capacity utilisation which is too high leads to longer waiting times for the guests at the cable car. If customers have to spend too much time in long lines to get to the top of the ski slopes or to the summit they will not be satisfied. Attractive project decisions can strengthen the entire marketing mix and thus the attractiveness of the cable car. Summary of the Initial Situation for the Cable Cars The Martinus Cable Car and the Perrot Cable Car are very similar with respect to the areas of topography and exposure and both have a ski slope network of approx 60 km, of which 3 km are provided with artificial snow, if necessary. During the past fiscal year, services were sold which correspond to 270,000 skier/guest days, and sales revenues of about 9.7 million CHF. The biggest costs are staff costs with an approx. 35% share based on the turnover. A free cash flow of nearly 4.1 million CHF was achieved. Further details can be obtained from the reports which you will receive at the beginning of the seminar.

Destination Management Organisation(DMO)

The Destination Management Organisation(DMO) is the only service provider which has per definition the responsibility of making an effort to develop the entire destination. For one thing, it will be active as a service provider within the destination, but it also makes marketing decisions that represent the destination externally. In addition, in its role as Sales Organisation for Package Deals, the DMO bundles the strengths of the individual service providers decisions. The packages include allotments which the cable car companies and hotels forward to the DMO as a bulk buyer. The DMO includes a commission and then resells these allotments as a complete package of services. The core task of the DMO, as the primary point of contact for the guests in the destination, is the operation of the Alpenorts Tourist Information. It also organizes events as complementary offers to the events of the individual service providers and arranges for public transportation within the destination. One of the DMOs most important responsibilities is to keep an eye on the interests of the destination as a whole and to make sure to be available as a contact partner for the individual service providers. In particular, if the Board of the Tourism Association has to make decisions on long-term joint projects, the Tourism Organisation (i.e. the tourism director, as their most important representative) will assume the role of the moderator, the mediator and be a source of inspiration.

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Summary of the Initial Situation for the Destination Management Organisation(DMO) The Destination Management Organisation(DMO) achieved sales revenues of more that 5 million CHF (*) during the recently completed fiscal year, whereas the largest sales turnover by far came from the sale of package deals. This was followed by revenues from contributions as well as revenues from the Tourist Information and the operation of local transportation. A profit of around 77,000 CHF (*) was thus achieved. Aside from the acquisition costs of the packages, the main costs units were personnel costs, the operation of local transportation and sales costs.
(*)

Depending on the number of service providers, the DMOs turnover and profit might also deviate from the values indicated here. Further details can be attained from the reports which you will receive at the beginning of the seminar.

Financial Decisions
When making financial decisions, it is possible to take out short or long-term loans and to convert reserve funds into securities, once the instructor has activated these options for you. The following applies: Short-term loans will bear interest in the year of issue and are automatically repaid in full the following year. Long-term loans will also bear interest beginning in the year of issue, but will not be amortized for the duration of the simulation. The purchase of securities will yield a profit in the period in which they were purchased; in the following year the securities will automatically be sold. The system automatically grants an overdraft loan, where necessary, although at much less favourable conditions than for loans which are applied for in advance. The interest payment and repayment of bank overdrafts needed are automatically occur in the following year. All inputs are for the business year in CHF.

Managing Board of the Tourism Association

The board of the Tourism Association will decide in particular on the financial fundamentals of the destination. Furthermore it will discuss adequate resources in relation to projects that are regarded as community tasks and projects, which only the destination as a whole can manage. During the course of the simulation, decisions will be made on three projects, depending on the number of rounds of negotiations. These projects will only be available for the period of time between board meetings of the Tourism Association. The actual decision in terms of a final selection in the decision field will be entered by the instructor. These projects are financed through a contribution (based on a percentage of the service providers sales), which is separately collected and declared. You will receive a detailed description of each project in due time before each meeting. You will learn more about the rounds of negotiations in the respective Terms and Conditions of the Tourism Association which your instructor will provide you.

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Scope of Decisions affecting the Target Groups

In general, all decisions from the service providers have an effect on the different target groups, some have a direct impact and others an indirect impact. All service providers decide on the amount of the budget for advertising measures directed at specific target groups. This can lead to scattering effects if individual service providers through their promotional activities address the target groups with varying degrees of intensity or completely different target groups. This form of direct marketing is less effective than coordinating the participants. Addressing certain target groups can be coordinated by discussing direct promotional measures among one another or, without the scattering effects, through pooled marketing via the marketing contribution to the DMO. The price policy of Martinus Cable Car and Perrot Cable Car is a crucial criterion for the formation of the target groups. Certain price levels for cable car day passes and 7-day passes are simply not attractive for target groups with lower income. Moreover, the target group structure will change when the discounts and quotas for sales by allotment (bulk buyers) are changed. The pricing decisions of the hotel industry for an overnight stay as well as the pricing of the standard menu offered have an impact on the target group since they like the price policy for the cable car companies are indicators for the price level and perhaps also the quality offered. What is decisive here is that customer satisfaction will then of course only be achieved if the quality offered and the service delivered justify the price-setting compared to the previous year and compared to other holiday destinations. Some target groups are addressed more intensely and others are intentionally excluded through the event budget of the DMO and in particular with regard to the type of selected events at the destination level. Also the events of the sport and event service providers address the various target groups, but not to the same degree. Some events offered could even act as a deterrent to certain target groups, while at the same time attracting visitors from another target group to which the event is more tailored for the destination. In addition, the entire offer for a particularly desired target group is relevant for the formation of the target groups in total: each service provider must design a consistent offer regarding decisions on projects, investments and the marketing mix, whereas these decisions are, if possible, to be coordinated in a community dialog with the other service providers in the destination. A part of the target groups, mainly driven by regulars, has a certain natural inertia, also known as the force of habit in the selection of a holiday resort. It is important to note that a destination is almost never entirely dominated by a single target group , but instead will always address different target groups through their offers. The attraction of the destination for certain target groups is also a criterion for the ratio of overnight guests to guests who only visit your destination for the day. Tourists from overseas are expected to spend more time at the destination and rarely make only a day trip to your destination. In Section 4.2 which follows, the user profiles of the various target groups, and their tendency to spend the night in the destination are explained. A destination thus directly and indirectly sets priorities through the mentioned decision options and in doing so generates an attractive service offer for the desired target groups. It is all in your hands now, as a service provider and as a group in the destination, to attract the desired target groups to Alpenort and to keep them coming back.

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TOPSIM - Destination Management

Initial Situation
At the beginning of the simulation you will receive the reporting procedure for the initial situation from the instructor. Based on these reports, and on the information from the introduction of the seminar, you can get an analysis of the actual situation on which you can make your decisions. Once active decisions have been made, this constitutes the market results for the initial situation of the previous period, which can be extrapolated with the respective economic data from the scenario. The frame of reference in terms of the relevant market for the entire destination, and thus also the benchmarking, is the tourism market in the Alpine region.

Overview of Relevant Market Data

Basic Market Volume of Destination Number of Tourists Summer Winter National 50,000 150,000 (Baseline: Visitors) Europe 35,000 100,000 Overseas 5,000 30,000

Customer Breakdown by Target Groups (Baseline: WINTER Season) Share of Day Tourists (%) Families Silver Agers DINKS + Singles Young & Wild Seminar / Incentive Guests Total User Profile in WINTER Families Cable Cars Hotels Premium Hotels Sport/Event Service Providers + + 0 Silver Agers + + ++ 0 Dinks + Singles + 0 ++ ++ Young & Wild ++ 0 -+ 0 Seminar / Incentive Guests 0 + + 0 25 25 30 20 0 100 Share of Overnight Stays (%) 35 15 30 15 5 100 Length of Overnight Stays (in Days) 5 4 3 1 1 -

++ + DMO Scale: very seldom - - to very frequent + + use.

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TOPSIM - Destination Management

Customer Breakdown by Target Groups (Baseline: SUMMER Season) Share of Share of Day Tourists Overnight Stays (%) (%) Families Silver Agers DINKS + Singles Young & Wild Seminar / Incentive Guests Total User Profile in SUMMER Families Cable Cars Hotels Premium Hotels Sport/Event Service Providers + + 0 Silver Agers ++ + ++ Dinks + Singles ++ 0 ++ ++ Young & Wild 0 0 -+ -

Length of Overnight Stays (in Days)

25 35 25 10 5 100

40 30 20 0 10 100

5 4 2 1 1 -

Seminar / Incentive Guests + ---

++ + DMO Scale: very seldom - - to very frequent + + use.

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