Steps to Formulating a Successful Plan in Management

Behind every successful tour operator, hotel chain, or travel-tech start-up is a plan that did not appear by accident. It was built step by step. Planning is the bridge between where an organisation stands today and where it wants to go tomorrow, and the quality of that bridge depends entirely on how carefully each step is laid. For students of tourism management, understanding how a plan is actually formulated is one of the most practical skills you can acquire, because it shapes everything from a heritage walk in Jaipur to a five-year expansion strategy for an OTA.

Why formulating a plan matters in tourism 🔗

Tourism is one of the most volatile industries in the world. Demand swings with monsoons, exchange rates, geopolitical events, viral Instagram reels, and policy decisions like visa-on-arrival reforms. Hospitality scholars have long noted that as the tourism business environment becomes more volatile and competitive, organisations must forecast future conditions if they want their objectives to be achieved. A well-formulated plan is what allows a hotel manager to anticipate a slow shoulder season, or a destination marketing organisation to position itself before a competing state launches a similar campaign.

Planning, in classical management thought, is described by Koontz and O’Donnell as an intellectual process involving the conscious determination of courses of action and the basing of decisions on purpose, facts, and considered estimates. That definition matters because it tells us planning is not guesswork dressed up in spreadsheets. It is a structured sequence, and each step in that sequence has a job to do.

Step 1: Perceiving opportunities 🔗

Every meaningful plan begins with awareness. Before a manager sets goals or allocates budgets, they need a clear picture of what is happening inside and outside the organisation. Management scholars Harold Koontz and Cyril O’Donnell argued that the first step in the planning process is awareness, where managers build the foundation on which they will develop their plans, pinpoint commitments, recognise strengths and weaknesses, and set forth a vision of the future.

In tourism, perceiving opportunities usually involves two activities working together: environmental scanning and forecasting.

Environmental scanning 🔗

Environmental scanning is the deliberate monitoring of the world outside the organisation for trends, signals, and shifts that could matter. Effective scanning tracks macro factors such as political, economic, social, technological, environmental, and legal influences, transforming planning from a reactive exercise into a continuous discovery of opportunities and threats before they escalate.

For tourism enterprises, the scan covers obvious areas like competitor pricing and traveller reviews, but it also extends to airline route announcements, currency movements, climate patterns, and the rise of new traveller segments such as digital nomads or wellness tourists. Tourism research has emphasised that the success of tourism firms relies heavily on their ability to adapt to changing external environments, making scanning a survival skill, not a luxury.

Forecasting 🔗

Forecasting takes the data gathered during scanning and projects it forward. Will inbound arrivals from the UK rise next quarter? Will fuel surcharges push package tour prices above what families are willing to pay? Forecasts can be quantitative, drawing on historical occupancy data and search-trend analytics, or qualitative, drawing on expert opinion and industry intuition. The point is to convert observations into a usable view of the near future, so the next steps of the plan stand on something firmer than hope.

Step 2: Establishing goals and objectives 🔗

Once opportunities are clear, managers must decide what they actually want to achieve. Planning starts with the setting of goals and objectives, which provide a rationale for undertaking various activities and indicate the direction of efforts. Without this anchor, the rest of the planning process drifts.

Good goals share a few qualities. They are specific enough to guide action, measurable so progress can be tracked, and time-bound so there is real accountability. The widely used SMART framework, introduced by George T. Doran in a 1981 issue of Management Review, captures this well, with criteria that are Specific, Measurable, Achievable, Relevant, and Time-bound.

Goals at multiple levels 🔗

A single overarching goal is rarely enough. A national tour operator might set an enterprise goal of growing revenue by 20 percent in a financial year, but that needs to translate into sub-unit goals: the marketing team aims to lift website conversions by a defined percentage, the operations team commits to launching three new circuits, and the customer service team targets a specific Net Promoter Score. Goals must cascade down so that every department understands its contribution, and they must roll back up so that effort across the organisation aligns.

Why measurable matters 🔗

Vague intentions like “improve guest satisfaction” do not give managers anything to plan against. A measurable version, such as “raise average TripAdvisor rating from 4.1 to 4.5 within twelve months,” forces the team to identify what specifically must change and to set up systems to track it. This is why goal setting and the rest of planning are so tightly linked.

Step 3: Appraising planning premises 🔗

After goals are set, managers must surface the assumptions on which the plan will rest. These assumptions are called planning premises. They are, in essence, the expected environment in which the plan will operate. Planning premises are the assumptions about the likely shape of events in future, and they serve as the basis of planning.

Internal and external premises 🔗

Premises fall broadly into two categories. Internal premises include factors the organisation can largely control, such as capital investment policy, management philosophy, available staff capabilities, and labour relations. External premises are conditions outside the organisation’s control, such as government tourism policy, GST rates on hotel rooms, oil prices, exchange rates, monsoon forecasts, and even the security situation in source markets.

For an Indian tour operator launching a new luxury Himalayan circuit, external premises might include assumptions about Centre and state tourism policy, the stability of road infrastructure post-monsoon, and visa processing times for source markets like the United States and the UK. Internal premises might include the assumption that two new fluent multilingual guides can be hired within three months and that the company’s working capital will support a six-month booking cycle.

Constant and variable premises 🔗

Some premises are relatively stable, while others shift constantly. Resources like physical infrastructure, established operating procedures, and core capital tend to be more constant in the short run. Variables like consumer sentiment, competitor pricing, weather, and currency move quickly. A good plan distinguishes between the two and builds enough flexibility to handle surprises in the variable category.

Why consistency matters 🔗

One often-overlooked principle is the need for shared premises across the team. Koontz and O’Donnell observed that when more people in an organisation use common and consistent planning premises, enterprise planning becomes more coordinated. If the marketing team plans for 15 percent inbound growth while operations plans for 5 percent, the resulting mismatch will show up painfully later, in the form of empty rooms or overbooked coaches.

Step 4: Identifying alternative courses of action 🔗

With goals set and premises clarified, the next step is to generate alternative paths to the goal. There is rarely just one way to get somewhere. A boutique hotel chain hoping to expand could open new properties under its own brand, franchise the brand to local owners, enter management contracts with existing hotel owners, or acquire a smaller chain. Each route leads to roughly the same destination but carries different costs, risks, and capabilities.

Managers should resist locking onto the first idea that surfaces. No single solution is often the best for achieving organisational goals, so managers must explore different options and select the one that best meets the objectives. The discipline of generating multiple alternatives is what separates rigorous planning from rationalised decision-making.

Step 5: Evaluating alternatives 🔗

Each alternative must then be examined honestly. The classic evaluation considers expected costs, expected benefits, time required, risk profile, resource requirements, and fit with the organisation’s strategy. A franchise model might scale faster but dilute brand experience, while a wholly owned model might preserve quality but consume capital that could be spent on technology.

Quantitative tools help here. Discounted cash flow analysis, breakeven calculations, sensitivity analysis, and scenario modelling allow planners to compare options on a like-for-like basis. But numbers do not decide everything. Strategic fit, brand implications, and management bandwidth all weigh in. After objective and scientific evaluation, the best alternative is chosen, with planners often using quantitative techniques to judge stability of an alternative.

Step 6: Selecting the best course of action 🔗

Selection is where commitment happens. The chosen alternative becomes the plan, and the organisation begins reorienting around it. Sometimes managers choose a single path; sometimes they combine elements of two or more alternatives if that produces a stronger result. A regional tour operator, for example, may decide to franchise in tier-two cities while retaining direct ownership in metro markets, blending two alternatives into a hybrid plan.

Step 7: Formulating derivative plans 🔗

A main plan rarely operates in isolation. It needs supporting plans that translate the headline strategy into operational reality. These are called derivative plans, and they include policies, procedures, programmes, schedules, and budgets. Derivative plans are the sub-plans or secondary plans which help in the achievement of the main plan, flowing from the basic plan and including policies, procedures, rules, programmes, budgets, and schedules.

Programming and budgeting 🔗

Programming breaks the main plan into sequenced activities with assigned responsibilities. If the headline plan is to launch three new circuits within a year, the programme specifies which circuit launches first, who leads route surveys, when supplier contracts are signed, and how training is rolled out. Budgeting attaches financial figures to each step, ensuring that resources are allocated in line with priorities and that managers have a yardstick against which to measure spending.

Sequence and timing 🔗

Effective plans pay attention to sequence. Some steps cannot start until others are complete; others can run in parallel. Tools like Gantt charts and critical path planning, mentioned in standard management literature, help establish and track schedules and priorities, mapping the interdependence of tasks identified during planning.

Step 8: Implementation and follow-through 🔗

A plan that sits in a presentation deck achieves nothing. Implementation moves it from paper to practice through clear communication, resource allocation, and assignment of responsibility. Each task needs an owner, a deadline, and the resources to deliver it. Without this, even the most elegant plan stalls.

Step 9: Monitoring, review and feedback 🔗

Finally, planning is not a one-time event. Conditions change, premises break, and competitors react. Managers must monitor progress, compare actual performance with plan, and adjust where necessary. Planning and controlling activities are closely interrelated, with planning feeding controlling by establishing the standards against which behaviour will be evaluated. The feedback from monitoring loops back into the next planning cycle, making the whole process continuous rather than linear.

Bringing it together in a tourism context 🔗

Imagine a state tourism corporation planning a new wellness tourism circuit. Step one is perceiving the opportunity through scanning data on global wellness travel growth and forecasting domestic demand. Step two is setting a measurable goal, such as attracting a defined number of wellness visitors within two years and generating a target revenue. Step three involves spelling out premises, such as expected airline connectivity, central government incentives under schemes like Swadesh Darshan, and the availability of trained ayurveda practitioners.

Step four lays out alternatives: build government-run retreats, partner with established private wellness brands, or offer subsidies to encourage new private investment. Step five evaluates each on capital, speed, and quality control. Step six selects a partnership model. Step seven creates derivative plans for marketing campaigns, training programmes, and infrastructure budgets. Step eight implements those plans. Step nine reviews them quarterly and adjusts as new information arrives. Each step builds on the last, and skipping any one of them weakens the whole.

Common pitfalls to avoid 🔗

Even structured planning can go wrong. The most common pitfalls include treating planning as a once-a-year ritual rather than a living process, setting goals without testing the assumptions behind them, generating only one alternative and rationalising it as the best, and writing brilliant plans that never get translated into derivative programmes and budgets. Tourism managers also sometimes underestimate how quickly external premises shift in this industry, failing to build in the flexibility that volatile demand demands.

What do you think? Which step of the planning process do you believe tourism organisations in your region get right most often, and which one tends to be the weakest link? If you were planning a new tourism product today, what assumption would you most want to test before committing resources?

References

1. https://pmc.ncbi.nlm.nih.gov/articles/PMC7131092/
2. https://www.studocu.com/in/document/anna-university/principles-of-management/pom-unit-ii-essay-notes/11249539
3. https://openstax.org/books/principles-management/pages/17-2-the-planning-process
4. https://www.itonics-innovation.com/blog/environment-scanning
5. https://www.researchgate.net/publication/254240078_Environmental_Scanning_Practices_of_Travel_Agent_Companies_in_Singapore
6. https://www.managementstudyguide.com/planning_function.htm
7. https://en.wikipedia.org/wiki/SMART_criteria
8. http://nraomtr.blogspot.com/2011/12/summary-principles-of-planning.html
9. https://slm.mba/mmpc-001/steps-planning-process-management/
10. https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/the-planning-cycle/