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Performance Evaluation Index System for Large-Scale Travel Companies


Summary table of award criteria according to award categories (Appendix)

18) shows that, for each travel business to be able to achieve the above awards, it requires that the business must have good performance in terms of finance (good business performance in the last 3 years), customers (number of tourists the business has served, customers are satisfied), internal business processes (applying technology, advanced quality management processes), learning and development (the business has the capacity to compete, integrate sustainably; has a human resource development strategy to meet integration requirements), and the business's responsibility to the community and locality (fully complying with financial obligations, taxes and other revenues of the State budget according to the provisions of law; being responsible to the community, actively participating in sustainable tourism development activities; having no violations of the law, dissolution or bankruptcy at the time of considering the Award). Accordingly, based on the goal of the travel business manager aiming to achieve a specific award, KTQT needs to establish appropriate performance evaluation indicators such as:

The financial performance evaluation indicators that need to be used are: Revenue growth rate year N/year N-1, Revenue growth rate from serving international tourists, Revenue growth rate from domestic tourists, Revenue growth rate from Vietnamese tourists traveling abroad, Gross profit growth rate, Profit growth rate after tax.

The customer-side performance evaluation indicators that need to be used are: Customer satisfaction with service quality.

Internal business process performance indicators: Number of new technology applications introduced in the enterprise

Learning and development performance indicators: Number of new training courses for employees.

Indicators assessing the business's responsibility to the community and locality: Number of times the business was fined by tax authorities, Number of times the business was fined by city authorities, Number of times the business was fined for non-compliance with environmental laws and regulations, Number of charitable activities for the local community during the period.

Based on the above-mentioned principled requirements that need to be ensured when building a system of indicators to evaluate the performance of enterprises and the importance of the indicators that travel enterprises have evaluated (Appendix No. 19), NCS proposes that large-scale travel enterprises can choose to apply the evaluation index system as shown in Table 4.1 and small and medium-sized travel enterprises can use the indicators in Table 4.2 below:


Table 4.1: System of performance evaluation indicators for large-scale travel businesses


STT

Rating Index Name


Financial indicators

1

Business productivity of the tourism program

2

Revenue growth rate year N/year N-1

3

Percentage of revenue from international tourist arrivals

4

Domestic Revenue Ratio

5

Revenue ratio from Vietnamese tourists traveling abroad

6

Revenue from group guests

7

Revenue from retail customers ratio

8

New tour program revenue/Total revenue ratio

9

Customer Satisfaction Rate of Tour Program Revenue

10

Percentage of revenue of the tourism program complained about

11

Gross profit growth rate

12

Profit after tax growth rate

13

Return on Investment (ROI)

14

Return on Assets (ROA)

15

Return on equity (ROE)

16

Current payment capacity

17

Fast payment ability

18

Debt to equity ratio


Customer-side performance evaluation indicators

19

Number of international arrivals served during the period

20

Number of domestic tourists served during the period

21

Number of Vietnamese tourists traveling abroad served during the period

22

Customer satisfaction with service quality

23

Group customer ratio = Total number of group customers/Total number of customers

24

Percentage of group customers who continue to sign contracts


Internal business process performance indicators

25

Number of new tour programs in the period

26

New tour program rate

27

Number of tour programs with satisfied customers

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Performance Evaluation Index System for Large-Scale Travel Companies


28

Customer satisfaction rate of the program (specific to each level)

“Satisfied”, “Quite satisfied” and “Very satisfied”)

29

Number of travel programs complained about

30

Program Complaint Rate


Performance indicators for learning and development aspects

31

Number of new training courses for employees

32

Number of industry associations of which the business is a member

33

Number of awards that the company won during the year


Indicators for assessing corporate social responsibility aspects

local

34

Number of times fined for non-compliance with laws and regulations

environment

35

Number of charity and community activities during the period

( Source: NCS proposal)

Thus, the system of evaluation indicators proposed for use in large-scale travel businesses as shown in Table 4.1 above has many differences compared to the system of indicators in Table 1.1 in Chapter 1. Specifically, NCS has inherited to develop, remove and supplement a number of indicators to serve the evaluation of the operational performance of travel businesses as follows:

With the group of financial indicators: The thesis inherits and recommends that travel businesses include indicators that have been used in previous studies such as "Gross profit growth rate, Profit after tax growth rate, ROI, ROE, ROA" into the system of indicators to evaluate the performance of their businesses.

The thesis is based on the following indicators: "Revenue growth rate", "Revenue growth rate of each product/service", "Revenue ratio of product/service i in total revenue" and develops into indicators such as: "Revenue growth rate in year N/year N-1, Revenue ratio from international tourists, Domestic revenue ratio, Revenue ratio from Vietnamese tourists traveling abroad, Revenue ratio from group guests, Revenue ratio from individual guests, Revenue ratio of new tour programs/Total revenue, Revenue ratio of tour programs that satisfy customers, Revenue ratio of tour programs that are complained about ". Because these indicators are suitable for the business characteristics of travel businesses with many different tour programs/tours, different customer groups (group guests, individual guests), managers need detailed information about the ratio.


Revenue from each of these tourism programs in the total revenue of the entire enterprise to serve as a basis for operations and making appropriate business decisions in the future.

In addition, the thesis also inherits the index "Enterprise Liquidity" and develops it into two indexes "Current payment capacity" and "Quick payment capacity"; Adds the index "Debt to equity ratio" to disclose information about these indexes at the request of related parties (for listed enterprises).

The thesis adds the index “Business productivity of tourism programs” (determined by Revenue/Cost) and calculates it for each tourism program that the enterprise operates, especially new tourism programs. The result of this index is the basis for the enterprise manager to decide whether or not to continue operating that new tourism program.

With the group of indicators to evaluate the customer's satisfaction: The thesis inherits and continues to propose using the index "Customer satisfaction level". And adds the following indicators: "Number of international visitors served during the period, Number of domestic tourists served during the period, Number of Vietnamese tourists traveling abroad served during the period" to meet the information requirements of the Ministry of Culture, Sports and Tourism.

In addition, the thesis does not reuse indicators such as “Number of repeat purchases by customers, Number of regular customers lost, Number of new customers, Number of new customers introduced to the enterprise by other customers, Number of years a customer has purchased from the enterprise” because they are not completely suitable for the business characteristics of travel enterprises with a large number of customers, the cost of monitoring these indicators is much greater than the benefits they bring. Instead, the thesis proposes to use two practical customer performance evaluation indicators for travel enterprises such as “Ratio of customers in groups = Total number of customers in groups/Total number of customers” and “Ratio of customers in groups continuing to sign contracts”.

Regarding the group of indicators assessing the QHĐ of the internal business process innovation aspect: NCS has based on two original indicators, "Number of new products introduced to the market in a certain period" and "Number of products provided in new packaging designed by the enterprise" to develop 06 new indicators suitable for the business characteristics of travel enterprises, which are tourism programs, namely: "Number of new tourism programs in the period, Rate of new tourism programs, Number of tourism programs with customer satisfaction, Rate of programs with customer satisfaction (calculated specifically for each level of "Satisfied", "Quite satisfied" and "Very satisfied"), Number of tourism programs with complaints, Rate of programs with complaints".


NCS has removed the indicator “Percentage of revenue from products introduced in a certain period of time” because this indicator has been developed in the group of financial indicators. At the same time, the indicator “Number of new ways of operating in a certain period of time” has been removed because enterprises in general and travel enterprises in particular are always looking for new business methods to improve their business performance, and the results of these new ways of operating have been shown in the above indicators .

Regarding the group of performance evaluation indicators of the learning and development aspect: NCS has edited the indicators “Number of short-term courses for employees” and “Expenditure on research and development in a certain period” to “Number of new training courses for employees” and “Ratio of training costs/Total costs”. However, the importance of the indicator “Ratio of training costs/Total costs” was not highly appreciated by travel businesses, so NCS eliminated this new indicator and retained the indicator “Number of new training courses for employees”. In addition, NCS proposed two new indicators “ Number of industry associations of which the enterprise is a member ” and “ Number of awards achieved by the enterprise in the year ” which were highly appreciated by large-scale travel businesses.

With the group of indicators assessing the QHĐ of the aspect of corporate responsibility to the local community: With this aspect, NCS has narrowed down the indicators "Number of times the company was fined by the tax authority, Number of times the company paid taxes due, Number of times the company was fined by the city government, Number of times the company paid business license fees due, Number of times the company was fined by a supervisory board" into a single indicator "Number of times the company was fined for non-compliance with laws and environmental regulations" to reduce the cumbersomeness of the QHĐ assessment index system, while still ensuring the information requirements of external stakeholders when presenting information in the Annual Report. In addition, the difference of this index system compared to Table 1.1. is the index "Number of charity and community activities during the period" because it meets the information needs of stakeholders, and is consistent with the current trend of travel businesses to pay more attention to community activities, aiming to implement community tourism programs to bring benefits to businesses, customers and local communities.

The system of HQHĐ assessment indicators proposed for large-scale travel businesses mentioned above has ensured all the principle requirements when building, has been assessed by large travel businesses as being of high importance and is completely capable of being calculated conveniently in the resource conditions of these businesses. However, in small and medium-sized travel businesses, with limited resources (human resources, IT systems, ...), operating characteristics and not being listed on the


stock exchange, so the system of performance evaluation indicators is more streamlined, meeting the information requirements of business managers and the Ministry of Culture, Sports and Tourism.

Table 4.2: System of performance evaluation indicators for small and medium-sized travel businesses

STT

Rating Index Name

Note


Financial indicators


1

Revenue growth rate year N/year N-1


2

Percentage of revenue from international tourist arrivals

*

3

Domestic Revenue Ratio

*

4

Revenue ratio from Vietnamese tourists traveling abroad

*

5

Revenue from group guests


6

Revenue from retail customers ratio


7

New tour program revenue/Total revenue ratio


8

Customer Satisfaction Rate of Tour Program Revenue


9

Gross profit growth rate


10

Profit after tax growth rate


11

Return on Investment (ROI)



Customer- side performance evaluation indicators


12

Number of international arrivals served during the period

*

13

Number of domestic tourists served during the period


14

Number of Vietnamese tourists traveling abroad served during the period

*

15

Customer satisfaction with service quality


16

Group customer ratio = Total number of group customers/Total number of customers


17

Percentage of group customers who continue to sign contracts



Business process performance indicators

internal


18

Number of new tour programs in the period


19

New tour program rate


20

Number of tour programs with satisfied customers


21

Customer satisfaction rate of the program (specifically for each program)

levels of “Satisfied”, “Quite satisfied” and “Very satisfied”)



Performance indicators for learning and performance aspects

develop



22

Number of industry associations of which the business is a member


23

Number of awards that the company won during the year



Performance indicators reflect the aspects of responsibility.

of enterprises with local communities


24

Number of charity and community activities during the period


( Source: NCS proposal)

Note: Indicators marked with an asterisk (*) are not required for businesses that only provide domestic travel services.

Above are two systems of performance evaluation indexes that NCS proposes to apply to large travel businesses and SMEs. However, businesses need to pay attention to the flexibility of this system because it depends on the business strategy in each period, annual operating goals, information needs of managers that change over time, IT systems, qualifications of accounting staff, etc. In other words, the performance evaluation index system needs to be reviewed, adjusted and improved continuously.

4.3.1.2. Regarding data collection and information for performance evaluation

To achieve efficiency in collecting data for the evaluation of the whole enterprise's business performance, NCS recommends that travel companies should start from the stage of setting up the travel program code , opening a detailed account, combined with the use of ERP software (for large enterprises) or building a new module with the function of connecting output data of departments in the enterprise. Specifically:

First: Opening code and detailed account

The opening of the code according to the tour program depends entirely on the information requirements of the enterprise manager and the creativity of the accountant, so there are many different ways to open the code. NCS believes that the opening of the tour program code should be set up in the following way : Departure year/Departure quarter/Departure month/Departure date/Tour scope/Tour name/Customer type . The code structure and data mining implications are shown in the box below:

Tour code

School

Data mining implications

Year of commencement

departure/departure quarter/

Departure month/

By year

(Example: 2021)

Serving the evaluation of financial aspects, internal business processes, and customers

Quarterly

(Example: I, II, II, IV)


Departure date/ Tour scope/

Tour Name/Customer Type

By month

(Example: 01, 02, …, 12)


By day

(Example: 01, 02, …, 31)

Serving the financial aspect of HQHĐ evaluation

By tour range

(For example: ND – Domestic, In – Inbound; And Out – Outbound)


Serving the evaluation of financial aspects, internal business processes, and customers

By tour name

(Example: Hanoi-Hue)

By customer type

(Example: Individual guests; Group guests)

Serving the financial aspect of HQHĐ evaluation

Accordingly:

For the data field by “Departure Year”: The departure year is the first number in the code, serving the statistical data by year. Therefore, after declaring this code into the system, the accountant only needs to type in the search by “year” to be able to get data on the following aspects:

Financial aspect: Combined with opening detailed accounts according to the code, for example: Account 5113 - Tour code; Account 632 - Tour code; Account 154 - Tour code, accountants enter the interface to declare revenue, cost of goods sold, products/services to determine data on Total revenue, Total cost of goods sold for the whole year. From there, the index "Revenue growth rate year N/year N-1" can be calculated;

Internal business process aspect: Determine the total number of new tourism programs launched during the year.

Customer aspect: Determine the total number of individual/group guests served during the year.

For the data field by “Departure Quarter” or “Departure Month”: By searching by “Quarter” or “Month”, accountants can also collect similar data as searching by “Year”, such as total revenue, total cost of each

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