- Project Definition
The development of a distinctive and high quality golf accommodation in Scotland, taking advantage of the natural settings and existing tourism in the area provides rationale for the projects of Trump International. Luxury golf tourism has been growing since 19th Century when English and Scottish aristocrats traveled for the best spots. According to Hudson (2009), the golf economy worldwide has a great economic impact on the regions. In Europe, according to the KPMG report (2008), in the USA alone, hospitality and tourism related to golf accounts for $18.001 million, while in Europe it is $3.492 million. (2005 and 2006 data). The report also concludes that the impact on the industry was great in Great Britain and Ireland.
The mission is to develop a self-sufficient landmark attraction in Scotland; a popular golf destination and resort.
The project is designed to provide hotel and residential resort accommodation with associated facilities for golf tourists. It is designed to create harmony with the nature, recreational facilities and great views for visitors. The residential village, on top of the golf hotel accommodation and the holiday homes would be created to provide a sense of belonging and community for those who are looking for a retirement home near golfing
Brand recognition would be one of the major forces that would enable the project to succeed. The quality standards detailed in the Master Plan, as well as the company’s experience with similar scale projects would provide the project with opportunities. Previous projects, such as the Trump International Golf Club in Palm Beach rated the number one course in Florida (Golf Magazine) and the project management experience of the company would provide the plan with a competitive advantage.
There are four different phases of project management, according to Westland (2007). These are: definition, planning, execution and delivery. The first phase of project development has so far covered goal setting, specifications, tasks, responsibilities and setting up of teams. The planning phase would consist of schedules, budgets, resources, risks and staffing.
In order to be able to provide the planning committee with making a decision about the next phase of development (choosing between Option 1 and Option 2 below), the following items would be required:
- Market reports
- Clear and detailed tasks – technical requirements
- Timeline -milestones
- Proposed profitability report of each option
- Detailed breakdown of expenditure
- Stakeholder reports
1.4. Assumptions and Constraints
The assumptions of the project indicate that there is a demand for high quality golf facilities and accommodation. Scotland has the longest tradition of golf as a sport, and the industry reports indicate the profitability of the project. However, there are some constraints regarding the development as well. Most of these are of ecological considerations that need to be addressed. While Trump International submitted an Environmental Report (McCullogh, Heywood and Cunliffe, 2008), there were several initial objections project managers had to face. This related to the carbon footprint, relationships with other communities in the area, rights of way and impact on biodiversity. Policies had to be implemented and need to be followed during Phase 2 in order to comply with the regulations and win the support of the public. Another constraint is the proposed project of creating a wind-farm near the residential village, which would affect the views provided for potential buyers.
- Option Evaluation
2.1 Option 1
Building the hotel complex first, and starting the residential village project after the hotel is fully functional. This would ensure that all the facilities are present by the time the residential village is built and the community is not “secluded”.
The 140 room luxury hotel’s establishment would cost approximately between £99.4 million to £150 million. The earlier plans indicated a total expenditure of £280 million. The views of the hotel over the ocean. It is likely to attract visitors as soon as it is open.
The time it would take to build the hotel complex with all the facilities would take around 18 months. However, as the initial costs are high, it is important to make the project be completed as soon as possible. Hotels generate income from the day they open, even after considering the initial investments and opening, marketing costs.
The quality of the development would not be affected by starting the next phase with the development of the hotel. Indeed, the landscaping of the surrounding area would make the future redisential village properties more attractive for buyers. Focusing on the hotel development, which will be of the high standard customers are used to from Trump International would positively affect the quality of the project.
Focusing on the largest project that creates residual income would be beneficial for the company. Having a fully operational hotel with all the facilities would attract visitors to the golf courses and increase the income from golf facilities; training and catering services provided. On the other hand, the presence of the hotel would increase the number of visitors to the golf course and the prices of the residential properties in the village to be built. Overall, the decision would be beneficial for the brand, the project and stakeholders alike.
Several risks could be eliminated at an early stage of the project management’s planning phase if the considerations, concerns and objections of the public and stakeholders were addressed during the discussions. One of the major risks of the project is that the company is “going out into the unknown”. They might be aware of the legal system, regulations and policies of tourism industry in different states of the US, but the United Kingdom is a completely different world regarding investments. On the other hand, the development has a high environmental impact (even though the plan takes into consideration landscape features and wildlife), including increased traffic, noise, pollution, infrastructure, not to mention the different impacts of the building works during the execution stage of the project. Therefore, seeking approval and suggestions from public would have an impact on the acceptability of the overall development among stakeholders. (Hughes, 1998. p.1. Box1)
2.2 option 2
The other approach to Phase 2 of the project would be to develop the residential village first. It would have all the facilities; including shops, restaurants and other services. While it would cost less than building the hotel, it would take longer, Donald Trump can draw on the experiences of building golf courses in America and reduce the time allocated for execution and delivery stages. The return of the sales would be higher than the income from the hotel. This is also a process-driven project management approach, described by Johnson Joyner and Martin. (Online)
The overall cost of the project would be around 3 million pounds, however, it provides higher returns than the hotel. This is a much lower expenditure than the 280 million pounds the hotel development part would cost.
Drawing on previous project experiences has its positive impact on the total project management timing. However, as the golf club development in Scotland would be somewhat similar to those that took place elsewhere, and the company would be able to reduce time spent on planning by revisiting the detailed project plans for each stage of the process. This means that the development of the residential village would take up to four years.
One of the main aims of the company is to create a development in Scotland that blends into the landscape, reflects the geological features, benefits all stakeholders and is of world class quality. According to Trump Jr. (2012), the company prides itself in quality luxury golf courses. This is true to the residential village developments, too. According to the Master Plan (Web) the “carefully planned around a dense core”.
The adaptation of frameworks from previous golf course and hospitality development projects would also be beneficial for the brand. Creating a signature layout for the resort, villas and hotel makes the company’s development recognizable worldwide. Visitors of other Trump golf resorts would be more likely to visit the new Scotland location if they knew that it had the same “Trump” design and features they are already used to. Public transport links and roads will also be developed, and this might increase the total expenditure of the project.
The major risk associated with completing the residential village development first is that there is a proposed project that would place a windmill close to the residential village, which would possibly reduce the potential selling price or market value of the properties. Until the final decision is made, jumping on the project might be re-considered, as views are the most important selling points of the future properties.
Overall, after assessing the above two options, the first option has proved to provide more competitive advantage for the company. Instead of starting the development of the residential village that takes four years and has a risk associated with, the company should decide to build the hotel and complex to accommodate the tourist guests looking to take advantage of the golfing facilities. According to the Golf Tourism Scotland report (Web), “Scotland has the potential to regain its position at the top of the list of must visit golf destinations, not only for the long haul travel but for the emerging markets benefiting from increased access to the country”. (p. 3.) This indicates that providing short term accommodation would be a profitable solution long term.
The development of the hotel, creating jobs in tourism would also provide positive publicity and media exposure for the property giant. This would have a positive effect on change management, brand reputation, public relations and the overall success of the project.
The main objectives of phase 2 according to the SMART guidelines are to: gain support, plan the execution and achieve full compliance through permissions. Gaining support from community groups would be a result of a 3-month planned consultation process, which would result in the project’s support in writing from at least 3 out of 5 groups. Planning the execution of the project would be started at the same time as the discussion with stakeholders and would take 6 months, taking into consideration the geological characteristics and surveys needed. Obtaining the permissions, due to the training provided for the project management team’s legal department would take 12 months, and this would involve the creation of environmental impact reports, their submissions to Scottish Government departments and approved by authorities. All work to be completed needs to have a permission at least a month prior to the execution date. It is more favorable to go ahead with the smaller project that takes less time to complete and generate income. The hotel would also add value to the golf course itself.
- Project Management Plan
3.1. Risk assessment
Risk assessment needs to be carried out before the execution phase starts. This involves pre-screening contractors, employees, eliminating legal risks through the development of relevant policies regarding liability, insurances, international, tax and duty affairs. Legal challenges, NGO actions and different social campaigns might endanger the execution stage; deadlines, plans and contractors. In order to minimize the risks, relevant policies need to be created specific to the current project, the political climate, considering the international and Scottish government regulations.
3.2 Stakeholder analysis
The project stakeholders need to be identified in order to successfully adjust and develop a strategy of communication and discussion. The stakeholder profile of the project consists of the individual project manager, the organization (Trump International), the project beneficiaries, suppliers, contractors, team members, government and NGO-s and the community representatives/organizations of the geographical area. While there has been an extensive discussion regarding the project among the Scottish Government, different NGO-s, local communities and organizations, it is important for the company to take on board all the suggestions that would later create a legal challenge regarding the continuous and long term services the project would involve, and its effects on different stakeholders. While Westland (2007) describes one more stakeholder group: sponsors, this group would not be relevant from the project management perspective, as there are no sponsorships involved in the investment. The funding is fully supported by Trump International.
3.3 Work Breakdown Structure
Level one of the Work Breakdown Structure would include the Master Plan. Level Two would involve training of project managers, support, equipment and optimization. It should also have milestones, timelines and technical requirements included in a report form. Level three would be the implementation of changes, creation of reports and documentation of the completed phases of the development.
3.4 Project schedule
The project schedule would include: development, land survey, plan design, engineering reports creation, obtaining individual development permissions and site planning. Next, the invitation of contractors and their pre-screening/selection would take place, based on the detailed plan design.
- Change Management Procedures
Processes within the change management need to be based on assessment and evaluation. According to Kirchmer and Scheer (2003. p.3), this is important because new customers are involved, new services are offered, some activities (execution project) need to be outsourced, and there are cultural differences in various enterprise locations.
4.1 Preparing for change
The first step would be to define the change. The main change within the project is that it exists in a new enterprise location. The next step would be the preparation of the change management team; appointing executives who have relevant knowledge about the regulations and economic, political forces in the United Kingdom, while the last step would be developing the model for change management.
4.2 Managing change
In this change, the company needs to develop detailed change management plans; including environmental impact studies, trial runs, market research and predictions. Next, the company needs to take action and implement plans.
4.3 Reinforcing change
At this stage of the change management project, the company needs to collect and analyze feedback. As the first option of project management Phase 2 has been selected, due to the shorter time it takes to complete and its impact on the golf course’s revenue, change will be more balanced and the company will have time to reinforce change. The company next needs to diagnose the gaps within the process of change management and manage resistance. The last stage of reinforcing stage would be to implement corrective actions and execute the final plan accordingly.
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Hughes, R. (1998) Environmental impact assessment and stakeholder involvement. Environmental Planning Issues No. 11. Available through: IIEd Website. <http://www.agentschapnl.nl/sites/default/files/bijlagen/56%20SEIA%20IIED-EIA_and_stakeholder_involvement.pdf> [Accessed 04/22/13]
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Trump, Jr. (2012) Effective Golf Course and Club Development Today.
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Westland, J. (2007) The project management life cycle: a complete step-by-step methodology for initiating, planning, executing and closing a project successfully. Available through: Google Books. [Accessed 04/22/13]
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An Assessment of Golf Tourism’s Future Growth Potential to 2020. (2011) SQW. Web. Available through: www.hie.co.uk website. [Accessed 04/22/13]