Tourism enterprises micro economy

1. Microeconomics
and
Tourism
Dalia Soliman
Helwan University
Egypt

2. McDonalds success factors

3. Mc Donalds
Three main elements:
• Standardization
• Economies of scales
• Mass marketing

4. Employment
2000 potential owners apply for McDonalds
each year
Only 150 are accepted
“Those with ketchup in their veins”
Age between 35 and 45
10 years experience

5. Franchising
• Franchisee
• Franchiser
• McDonalds own the land
• Initial fees
• The company charges 10% royalty fee and
advertising fee

6. Low costs
• Strict purchasing and portion control
• Disposable plates
• Limited menu
• Self service
• Simple cooking equipment requiring a minimum
level of skills
• The sales forecasts are made daily at each store.

7. High labor turnover
• High turnover leads to few pay raises
• Young people with little work experience

12. LOW COST CARRIERS
 Operating an airline is both capital and
labor-intensive.
 The airplanes, maintenance, fuel,
regulatory fees, pilots, crew, agents,
baggage handlers and other key
components of airline operations aren't
cheap.
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13. 1-AIRPORT SELECTION
 Airlines must pay fees to each airport they operate
out of, but different airports charge different fees.
 By operating out of less popular airports, airlines
can save money on these fees.
 Less-busy airports can also save airlines money by
wasting less time at the gate.
 The more flights an airline can operate, the more
tickets and extras it can sell and the more money it
can make 13

14. 2-OIL PRICE HEDGING
 Fuel represents a major expense for any
airline.
 Fuel prices change unpredictably and
sometimes significantly.
 With the amount of fuel airlines use, even a
small uptick in fuel prices can have a major
impact on an airline's profit margin.
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15.  To protect against these price changes,
airlines can engage in oil price hedging.
 Hedging is an investment strategy for
reducing the risk of price movements
 The contract takes place between the buyer
and the seller and basically obligates both
parties to buy or sell an asset at the price
agreed upon at the time of the contract.
 Delivery and payment take place at a future
specified date .
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16. This strategy is not without risk,
however. If an airline locks in its fuel
prices when oil costs $100 a barrel
and the price later drops to $90, the
airline would have been better off
without the hedge.
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17. 3-AIRCRAFT OPTIONS
 By only operating a single type of aircraft, airlines
can cut their operating costs in several ways.
 They can negotiate discounts on the purchase price
of numerous identical aircraft purchased at once.
 They can also save money on maintenance
because they only need tools and parts for one
type of airplane, and they only need technicians
who know how to fix one kind of airplane.
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18. 4-NUMBER OF SEATS
 Putting as many seats as possible into a
plane is another way to make aircraft
operations more profitable.
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19. 5 – MEALS, SERVICES AND ENTERTAINMENT
 When it comes to in-flight meals , it is a way to
save or make money
 While Southwest and Delta offer modest free
snacks like peanuts and crackers, Virgin
America charges for meals, sandwiches and
snacks.
 Spirit sells snacks ranging from $1 to $10 and
drinks ranging from $1 to $15.
 Jet Blue's meal boxes cost $5.99, and Alaska's
in-flight meals and snack boxes cost $6 to $7.
 Delta also sells meals and snacks that range
from $3 to $8.50. United charges for snacks and
meals, too.
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20.  In-flight entertainment presents another
opportunity for airlines to make or save money.
 Jet Blue charges $5.99 per movie on domestic
flights.
 Delta also charges $6 per movie or per
television bundle.
 Southwest's started to offer $5 in-flight WiFi on
some of its planes.
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23. RYANAIR
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24. RYANAIR SAVES MONEY BY REMOVING THE POCKET
(SO IT DOES NOT HAVE TO BE CLEANED)
AND ATTACHING THE SAFETY CARD TO THE BACKREST.
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27. COLOMBIAN LOW-COST AIRLINE WANTS TO INTRODUCE 'STANDING SEATS'
ON FLIGHTS VISIT
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33.  So, it's about paying careful
attention to numerous behind-
the-scenes expenses, and
looking for opportunities to
charge passengers for optional
extras while keeping ticket
prices low.
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