Business Environment of Travel and leisure sector - Assignment

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
a) Key issues in the business environment that are significant for Travel and leisure sector 3
b) Potential issues impacts of identified micro issues............................................................4
c) Describing two challenges faced by carrying above two tasks and suggesting ways to
overcome them.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business Environment is the external and internal surroundings and factors which
influence business operations. The main aim of this project report is to identify key issues which
are influence this type of environment. In this project report various issues are identified which
influence business environment of travel and leisure sector. Impacts of these issues is also
analysed on variety of organisations which operate in different business environments. In order
to effectively conduct these tasks, a reflection report is also generated stated issues which are
faced while performing these tasks. Along with these issues, various measures to overcomes
these problems has also identified (Botha, Kourie and Snyman, 2014).
MAIN BODY
a) Key issues in the business environment that are significant for Travel and leisure sector
Business Environment is classified into two category that is internal and external.
Externals environment is further divided into micro and macro. Macro environment is a
collection of various aspects such as political, economical and many more. Travel and leisure is a
sector which comes under hospitality industry. In order to identify key macro issues it is
important to use PESTLE analysis model. Issues effecting business environment of Thomas cook
is discussed below:
Political issues - Political factors are the issues which are faced by an organisation due to
political parties of nation in which a company operates. Thomas cook is a multinational company
which operates in several countries due to which they has to handle political issues of various
countries. These issues may arise out of policies and procedures which are prescribed by political
parties of a country. Travel and leisure is a sector which requires numerous permissions and
authorities due to which it is even harder for organisations like Thomas cook to handle these
issues which occur in their business environment.
Economic issues - Economic factors includes taxation and interest rates which impacts
demand and supply of a company. In the case of travel and leisure sector, taxation rates on hotels
and other necessary requirements can effect demand of Thomas cook. For example: If due to
economic factors taxation rates on hotels accommodation increase then accordingly costs of
travel packages of Thomas cook will also increase which will impact it's demand and supply
(Hamilton and Webster, 2015).
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Social issues - These factors are the choices and preferences of society due to which
business environment of an organisation gets influenced. For example: If current market trend
changes and prefers to travel to distinct places then travel companies has to face issues of high
cost involvement in order to research about those distinct places.
Technological issues - Current scenario of world is highly influenced by technological
factors. Every consumer requires technical effect in the services they get. In the case of Travel
and leisure sector, consumers demand for services which are technology friendly due to which
cost of their travel packages increases. The most significant example of technology is emergence
of internet. By using the technology of internet, travel industry can get benefitted but this
convenience also has few issues such as non reliability and high chances of fraud.
Legal issues - These issues are the laws and legislations which limits the operations of a
business organisation. These laws restrict the Travel and leisure industry to perform various
tasks. For example: Thomas Cook is not permissible to provide travel packages to their clients of
travel destinations which are restricted by governmental authorities. This factor has an another
impact on this company. Thomas cook operates in multiple countries due to which they has to
follow the laws and legislations of all those countries (Huang-Horowitz, 2015).
Environmental issues - These factors are the issues which are raised from the
environment. Travel and leisure sector involves operations of travelling to different locations and
variety in the environment of those locations can impact their operations.
The above key issues states that the business environment of travel and leisure sector is
influenced by various kinds of factors. The above issues reflects the problems which are usually
faced by travel industry and its companies mainly Thomas Cook. Besides these macro issues,
there are few other issues as well which are faced by travel and leisure companies. Staff
imvolment, licensing and productivity are also few internal and micro issues which are faced by
these type of business organisations (Guay, 2014).
b) Potential issues impacts of identified micro issues
Potential impacts which effect functioning of travel and leisure industry are related with
the issues mentioned above. In order to ascertain the impact on business environment, two of
issues are selected that is environmental and technological. These issues are faced by every
organisation working in travel and leisure. Besides Thomas cook, there are various hotel
subsector which are impacted by these issues. These hotel subsector can be classified according
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to the size and type of the business organisation. Hotel subsectors can be motels and restaurants.
These subsector are directly directed with leisure but indirectly related with travel industry. The
indirect link between these two industries is that individual doesn't not are in direct contact with
motel and restaurants in which they dine in as there is a interference of travel companies which
manage their trip according to their needs. Impact of environmental and technological issues on
hotel subsector such as restaurant and motels is discussed below:
Environmental impact - environmental issues were considered to influence travel and
leisure sector by changing the whether. There are other issues also present which specifically
influences motel and restaurant hotel subsection and that is sustainability. Motels are the updated
versions of hotels which are usually available on low rates but has all basic requirements. Motels
provide accommodation to their clients which are influenced by the existing condition of
environment of that particular location as they act as the basis of demand and supply of motel
accommodations. This issue of environmental impact can be better understood with an example.
If a motel is situated at the location where whether is uncertain then this circumstance can impact
the demand of their accommodations (Nonaka and Reinmoeller, 2017).
The another subsector of hotel is restaurant which initially comes under food and
beverage industry. In this type of subsector food products and services are provided to clients in
order to attain their satisfaction and earn profitability. Restaurant is also a type of organisation in
hospitality industry which is influenced by environment issues. Climate change and water
scarcity will have a big impact on the food and beverage industry which can have the following
impacts on the sector. Increase of prices of agricultural commodity and increase price volatility
by decreasing yields. Another impact is increase processing costs through operational disruptions
and treatment costs. Food safety challenges and conflicts with local communities over resource
use is also a impact of environmental issues. In order to overcome with the issues of
environmental, organisations make efforts to incorporate sustainability in their operations.
Technological impact - In the case of travel and leisure sector, main technologies which
can impact the performance of its companies is internet. As this technology allows clients to
research about hospitality companies from any part of the world. In the current scenario, clients
can book their whole trip including transport, hotel and food etc by a single click. Issues which
are faced by hotel subsector due to technological issues are high competition, high cost
involvement. In order better understand impact of these issues, hotel subsectors which are
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selected are motel and restaurant (Reuer, 2017). In the case of restaurant, there is a high
influence of technological factors on the functioning of restaurants. This kind of hotel subsector
deals in food and beverage industry. According to the current trends it is usual by clients to
promote food of a restaurant using social media sites by which intense competition has to face by
restaurants working in same segment of food. Technological factors such as technological
advancements focuses on usage of new and efficient processes and machineries which can cost a
treasure. This advancement result in high cost involvement.
Another hotel subsector which has selected is motel. Motel are considered as shorter and
simpler versions of hotels which has all the basic necessities for clients but does not deal in
various kinds of star category. Impact of technology issues on motels is that their client demands
upgraded technology in the premises of motels such as automatic doors, motion detection
equipments and many more which are hard to introduced by these subsector as profit margin of
these type of business organisation is relatively low. Business Environment is considered as the
sum of all factors external and internal. Technological factors or issues comes under external
business environment and effect the function of motels at a micro level.
Technological factors are the macro issues which are faced by hotel subsector but their micro
impact is mentioned above (Charter, 2017).
From the above two macro issues that is technology and environment, micro impact on
hotel subsector is discussed. It has been observed above that these issues can be resolved with
measures of right marketing and use of this macro influencers in order to attain benefit from
them.
c) Describing two challenges faced by carrying above two tasks and suggesting ways to
overcome them
Ascertaining business environment of an organisation and its industry is a crucial task to
perform. While performing these tasks there were several challenges faced by me which are
mentioned below along with their measures of overcome:
Research - According to me, it is easy to research about a company like Thomas Cook
but is crucial to investigate about an sector such as travel and leisure as they do not a particular
dimension in which they operate. There are various segments of hospitality which comes under
travel and leisure sector and are identified by me such as hotel, motel, restaurant, casino, flights
and many more. Analysing business environment of this sector resulted in various issues such as
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lack of data which is required. Second issue is segregation of collected data. Information
gathered by the investigation requires a lot of analytical approach in order to interpret the results.
In order to overcome with these issues, there is a measure which lead towards research
sustainability. Identification of appropriate research design and approach can help in better
investigation about business environment of travel and leisure sector.
Data analysis - Second issue in which I faced various problems is data analysis. In order
to provide reliable conclusion it is important to analyse and interpret all the data which is
collected during the investigation. But due to complexity in data, this task became crucial.
According to me, data analysis can be done easily when we have information which resembles
with each other. For example: Cots incurred in travel sector has relevance with clients of travel
sector and not the leisure segment. This complexity of data lead me towards confusion and
overlapping of work. In order to effectively conduct this task, I identified a way out which
helped me in overcome this issue. Use of analytical tools such as graphs and charts. With the
help of this technique, I analysed all the data using graphs which can provide immediate
information about the data.
CONCLUSION
From the above project report it has been concluded that travel and leisure sector is that
segment of hospitality industry deals in activities of comfort. This sector has various issues
identified in with the use of PESTLE model. Impact of these issues is also identified from which
it is concluded that these issues can be tackled with the help of proper measures. A reflective
report is also developed to ascertain the challenges faced while performing the tasks.
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REFERENCES
Books and Journal:
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Huang-Horowitz, N C., 2015. Public relations in the small business environment: Creating
identity and building reputation. Public Relations Review. 41(3). pp.345-353.
Guay, T R., 2014. The Business Environment of Europe: Firms, Governments, and Institutions.
Cambridge University Press.
Nonaka, I. and Reinmoeller, P., 2017. Knowledge creation and utilization: promoting dynamic
systems of creative routines. Creating value: winners in the new business
environment. pp.103-126.
Reuer, J., 2017. How real are real options? The case of international joint ventures. Creating
value: Winners in the new business environment. pp.59-81.
Ricciardi, F., Zardini, A. and Rossignoli, C., 2016. Organizational dynamism and adaptive
business model innovation: The triple paradox configuration. Journal of Business
Research. 69(11). pp.5487-5493.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
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