Impact of Macro Elements on Travel and Leisure Sector

The given study concludes that various macro elements have a significant impact on the travel and leisure sector. Companies need to pay attention to these key issues and make changes in their strategies to effectively deal with external factors. The study highlights the importance of monitoring market conditions and taking immediate action to sustain in the market for longer duration.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK.............................................................................................................................................................3
a.) Key macro issues in Travel & Leisure sector.......................................................................................3
b) Potential impact of macro issues at micro level..................................................................................5
C) Challenges faced during task and ways to overcome these challenges...............................................6
CONCLUSION...............................................................................................................................................8
REFERENCES................................................................................................................................................9

INTRODUCTION
There are many internal and external factors that have high influence over overall
operations of firm (Robinson and et.al., 2016). Present study is based on travel and leisure sector
that includes cruise, hotels, restaurants, airlines etc. Assignment will be based on Hilton hotel
that provides luxurious services to consumers across the world. Report will explain key macro
issues that are significant for this industry. Furthermore, it will describe potential of these issues
at micro level. Assignment will discuss two challenges and will suggest ways to overcome these
challenges.
TASK
a.) Key macro issues in Travel & Leisure sector
Travel and leisure industry contributes well in economic development of nation. It is
dynamic sector that has largest commodity of export. But this industry is facing many key
challenges that affects its overall performance to great extent (Mhlanga and Steyn, 2017). It is
essential for travel and leisure sector to understand these elements and prepare strategies to deal
with it. These key issues are explained as below:
Political issues
This is considered most essential element for any business to run its operations
successfully. Political stability, condition of government determines overall image of any
destination. Most travelers like to go to such locations where political conditions are stable and
authorities are paying more attention towards terrorism. Stable political conditions attract
tourists that aids in increasing foreign reserve of nation (Hokkanen, 2016). There are many tour
operators, hotel, accommodation business that face critical issues due to political unrest, strikes,
tough regulations in the country (Pestle Analysis of Travel Industry, 2017). Like for example
travel and leisure centers are largely influenced by implication of Brexit. It has been recorded
that the number of domestic holidays in the United Kingdom has been increased by 71% in 2016
from the 61% been recorded in 2015 (Kremer and Symmons, 2015). Also, United Kingdom
report highlighted that in the survey of more than 7000 international holiday makers over 60% of
the people stated that they were now more interested in visiting the place (Liu, Zhu and Zhang,
2018). This has laid impact on the increase in business of travel and tourism sector.

Economic issue
Travel industry is the biggest support to any economy,. This sector increases employment
opportunities, helps in increasing foreign reserves of nation and also support in generating more
profit. Changes in currency value creates issues for the sector because due to which demand get
decreased. If there is high inflation, then it may impact on spending power of customers. Thus,
people do not spend much on planning holidays or going to any leisure firm (Tutor and Soares,
2014). Tourism’s impact is amplified through the economy, so its impact is much wider than just
the direct spending levels. It has been analyzed that for every £1,000 generated in direct tourism
there is a further £1,800 that is supported elsewhere in the economy through the supply chain and
consumer spending (Liu, Zhu and Zhang, 2018).
Social issue
Changing needs of consumers, culture, social values influence decision making of
customer. Tourists who is traveling to particular location impact on community. Child labor is
the most critical social impact of tourism and leisure sector (Zabeen and Al Mamun, 2015).
There are many hotels, airlines that hire below 18 year kids because they have to pay less wages
to them. In last two years’ demand of leisure good have been decreased in UK due to ageing
population. Thus, social issues impacts on profitability of business that work in this industry
(Pestle Analysis of Travel Industry, 2017). Like for example after Brexit the social life of
travelers were affected on huge basis. It has become a boom period for travel and leisure sector.
After implementation of Brexit 43% of self proclaimed solo travelers are going more
adventurous trips.
Technological issues
In the recent time, customers expect that leisure companies implements latest
technologies in order to offer them updated services. Travel firms, airline, hotels are now using
online reservation system and also offer online customer services to clients. But due to
increasing use of technologies frauds have been increased that has decreased trust of tourists to
great extent. Technological factors have impacted travel and leisure center on huge basis. Like
for example 70 % of cruise bookings in United Kingdom are made through online booking apps.
(Kremer and Symmons, 2015).

Legal issues
Continuous changes in legislation impact on business and affect its sustainability as well.
Travel and leisure industry has to follow these laws carefully because it directly or indirectly
affects entire traveling process and services. This hurdle impact on brand image of entities
(Gregorić, 2014). Various laws like health and safety act, consumer protection act has been
implemented by government which needs to be followed by travel and leisure industry. Like for
example they need to provide safe working conditions to the employees working under them.
Environmental issue
Increasing tourism activities and leisure services have negatively affected atmosphere.
This has increased issue of overcrowding, pollution. Increasing fuel prices has enhanced travel
cost. Climate changes decreases tourist arrival that negatively impact on hotels, airline firms etc.
Changes in climate, floods etc. natural disaster have discouraged the arrival of travelers
(Samoilenko, 2016). Furthermore, increase temperatures affect overall weather condition of
destination. That makes travelers or visitors negative towards location and they change their
mind to go there.
b) Potential impact of macro issues at micro level
There is significant relationship between macro and micro environmental factor. Macro
components are such elements that exist in external market and company has no control over it
whereas micro elements are such components that are under control of organization. Micro
issues impact on micro level of business to great extent. Any changes in external environment
affect travel and leisure center directly or indirectly. Companies have to be prepare to deal with
these challenges and have to ensure that these macro issues do not adversely affect micro level.
Various macro issues like implementation of Brexit is highly influencing the travel and
leisure center at micro level. Like for example this political factor has affected the hiring of
workers in travel and leisure sector due to increase in cost. Macro issues are uncontrollable and
travel and leisure have to make changes in strategies in such manner so that companies can run
its operations successfully. Spending power of customers is highly depended upon economic
condition of nation. This includes tourism and leisure which is a major player for the UK
economy, worth a staggering £127 billion and responsible for 1.6 million jobs (Liu, Zhu and
Zhang, 2018). But inflation, increase exchange rates, decreasing value of currency create

difficulty for the travel and tourism leisure sector. In such type of condition company may have
to compromise with many existence practices and strategies that affect its expansion strategies
and impact on profitability of the firm as well. UK has made changes in its interest rates that is
created issue for business in borrowing amount. (Somerharju and Rinne, 2014).
Furthermore, raising unemployment rate is another cause of economic issues at micro
level of travel and leisure sector. Over a period of time unemployment rate has been increased in
UK, that results lowering customer’s spending. By this by demand of travel and leisure products
have been decreased. After Brexit there has been a significant fall in pound for the United
Kingdom. This has impacted the in-bound consumers or travelers in travel and leisure center.
Over 2.95 million tourists visiting the UK each year, spending £2.73 billion because of which
micro factors like hiring of employee's has been impacted of travel and leisure center. (Robinson
and et.al., 2016).
Another major macro issue is socio-cultural problem. This external problem has high
influenced over micro level of travel and leisure center. It is very important for travel and leisure
centers that to consider social values, needs of consumers while formulating its business
strategies. If this thing has been ignored, then it may decrease demand of products. It is popular
for its consumer services and high quality products (Mhlanga and Steyn, 2017). If there is
changes in taste and preferences of consumers then it affects profitability of firm directly or
indirectly. Now changing life style pattern, family structure influences the business operations
of travel and leisure sector (Hokkanen, 2016).
Age, gender, social conventions etc. influence the choice of buyer. There are many
people those like luxurious services whereas some of them like affordable products and services.
Hilton hotel is the leading brand and most of its services are costly. Due to such social factors
Hilton fails to satisfy its consumers. Now people are more aware with health and they prefer to
buy healthy dishes (Iglesias and Feng, 2017). In such condition, Hilton has to make changes in
its services and products so that it can meet with this requirement of its guests. This social
change has increased cost of business and affected operational process of business to great
extent.
C) Challenges faced during task and ways to overcome these challenges
Issues

Above study was based on impact of macro environment on travel and leisure sector and
its relationship with micro level. The first challenge faced by researcher during this study is
about poor knowledge of sector and topic. I had to develop my understanding about the issues
which are been affecting at micro and macro level for travel and leisure centers. Also I have to
do the keen research about the statistical data which shows the impact of various environmental
factors on the travel and leisure center. Also, other challenge like it was lengthy and time
consuming to understand the impact of political factor like Brexit on travel and liesure sector As
individual had no knowledge of travel and leisure sector and its operations thus, it was difficult
to find out macro issues of this sector and link it with micro level of business. In order to
perform such task it is essential to have basic knowledge of industry and its working pattern so
that both can be linked. Also I posses poor knowledge about the various topic which has been
discussed in the report.
Another issue that has been faced by me during this study that availability of poor
resources. Poor availability of resources create issue in involving things to answer the question.
As scholar was needed funds to gather more details about macro issues in travel and leisure
sector and its link with micro level of hotel. It is essential for researcher to have practical
knowledge of how to apply Pestle analysis to conduct the report. All these resources help the
person in managing activities and finishing investigation within specified period of time.
Ways to overcome these issues
 Researcher should schedule activities properly and have to effectively utilize resources in
research. Scheduling activities and deciding priority task help in completing most
essential activities first. This assist in finishing this study within specified period of time.
Furthermore, if resources utilize by scholar in systematic manner then it may help in
minimizing unnecessary cost. By this way scholar would be able to complete entire
research with available resources.
 Poor knowledge was another issue faced by researcher during this investigation. In order
to overcome this challenge scholar has to take support of previous literature of similar
topic. There are many authors those who have conducted their studies on same topic. This
will help scholar in developing in-depth understanding about subject and answering the

macro issues of travel and leisure sector. Reviewing this literature is simple and time
saving activity that may support the person in finding end result.
CONCLUSION
From the above study it can be concluded that there are many macro elements that have
significant impact on industry. Companies are required to pay attention on these key issues and
make changes in its strategies in order to deal with such external factor effectively. Political,
economic, social, technological, legal, environment components are uncontrollable. Any change
affects the operations of organization badly. These macro elements have interrelationship with
micro level of business. Changes in economic condition affect profitability of the company.
Furthermore, changes in social conditions, taste, preferences of consumers may impact on brand
image of the firm. Thus, business is required to monitor the changes in market condition and
immediately take action to deal with these challenges. This may support the firm in sustaining in
market for longer duration.

REFERENCES
Books and Journals
Gregorić, M., 2014, May. PESTEL analysis of tourism destinations in the perspective of business
tourism (MICE). In 22nd International Congress, Tourism & Hospitality Industry 2014,
Trends in Tourism and Hospitality Management.
Hokkanen, T., 2016. Recent developments in inbound tourism in north karelia.
Iglesias, M. and Feng, Y., 2017. Language travel supply: the case of Idealog. International
journal of scientific management and tourism. 3(3),. pp.91-110.
Kremer, P. D. and Symmons, M. A., 2015. Mass timber construction as an alternative to concrete
and steel in the Australia building industry: a PESTEL evaluation of the
potential. International Wood Products Journal. 6(3). pp.138-147.
Liu, J., Zhu, J. and Zhang, J., 2018. A DEA-based approach for competitive environment
analysis in global operations strategies. International Journal of Production Economics.
Mhlanga, O. and Steyn, J. N., 2017. Impacts of the macro environment on airline operations in
southern Africa.
Robinson, P. and et.al., 2016. Operations management in the travel industry. CABI.
Samoilenko, A., 2016. E-commerce in Russia: Challenges and Opportunities: Russian e-
commerce market for local and foreign enterpreneurs.
Somerharju, H. and Rinne, T., 2014. Cultural challenges for Finnish SME’s when breaking into
the US market.
Tutor, M. and Soares, A., 2014. European Tour Operators analysis.
Zabeen, M. and Al Mamun, A., 2015. Marketing Strategy of Publication Industry of Bangladesh.
Online
Pestle Analysis of Travel Industry. 2017. [online]. Available through
http://marketingdawn.com/pestle-analysis-of-travel-industry/