Contemporary Issues in Travel and Tourism

This report analyzes contemporary issues and trends driving change in the travel and tourism sector, focusing on Sri Lanka and British Airways. It examines the impact of political instability, terrorism, and technological advancements on the tourism industry in Sri Lanka. The report also explores emerging trends like dark tourism, medical tourism, and sex tourism, and their influence on Costa Rica's tourism product and service offerings. Finally, it examines British Airways' response to these changes, including its strategies for adapting to new market demands and the consequences of failing to respond to evolving needs.

Contemporary Issues
in Travel and Tourism

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Current issues that are driving change in the travel and tourism sector................................1
1.2 Analysing at least two issues of Sri Lanka that are driving change in the travel and tourism
sector............................................................................................................................................3
TASK 2............................................................................................................................................4
2.1 Emerging trends that are influencing change in the travel and tourism sector of Costa Rica
.....................................................................................................................................................4
2.2 The way emerging trends affect Costa Rica in terms of tourism product and service
offerings.......................................................................................................................................5
TASK 3............................................................................................................................................6
3.1 The way British Airways has responded to emerging trends in terms of type of travel and
tourism products offered..............................................................................................................6
3.2 Developing strategies on how British Airways could respond to change.............................7
3.3 Justifying strategies used by British Airways to respond to change.....................................7
TASK 4............................................................................................................................................8
4.1 Impacts of issues and trends on the performance of BA.......................................................8
4.2 The consequences of firms like BA failing to response to the changing needs....................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In the present era, there is continuous transformation in the places and issues across
world that is putting a huge impact on travel and tourism industry that vary from nation to nation.
There is continuous growth and advancement in travel and tourism sector which is grabbing the
attention of people every day and industry is earning higher profits and revenues (Horner, 2012).
The selected destination for present study is Sri Lanka which is experiencing a strong tourism
growth, having an aim to get rise in the international visitors in between the year 2012 and 2022.
However, at the same time, many challenges, issues as well as current trends are discussed here
that nation is dealing with in this sector. Further, the airline company, British Airways has been
chosen for study that is based in the UK and with reference to same, the way travel and tourism
sector responds to change with be discussed. Also, the impacts of change on this industry will be
studied.
Sri Lanka is ranked at 64th position in travel and tourism sector across world as per the
competitive report of 2017. In this year, country has recorded its highest ever number of tourists
i.e. more than 2.1 million which shows that the sector is at boom. In Sri Lanka, cultural tourism
has always been a drawback but, on the other hand, sectors like health, sports and events prove to
be a success for nation. It is considered as an affordable destination in comparison to other places
like Singapore and Maldives (Sri Lanka - Travel and Tourism, 2018). Country has been growing
tremendously in hotel sector with which it has gained rise in foreign investment as people from
different countries are coming to visit the nation for distinct business purposes. Further, nation is
enjoying growth in business tourism with the help of meetings, conferences and exhibitions.
With the same, it can be said that 2018 seems to be a good year for Sri Lanka but, its success
might get hindered because of some factors that will be explained in the report.
TASK 1
1.1 Current issues that are driving change in the travel and tourism sector
Travel and tourism sector is getting highly influenced with various issues that drive
changes in the industry. Some of these factors are like:
 Technological development – Advancement in the technologies being used in tourism
sector proves to be highly effective. With bringing high development in the technological
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sector, this sector of different nations has become connected and so, now tourists are
aware of different destinations as well as their attraction points.
 Terrorism – One of the main reasons which is driving change in travel and tourism sector
is terrorism which is hampering the number of travellers coming in this nation to visit and
thus, affecting its profitability. Due to having threat of terrorist activities now-a-days, it is
vital for tourist destinations to take strict measures for safeguarding the tourists.
 Low cost airlines – Having low cost airlines like Air Arabia, Air India Express, etc. drive
a positive change in travel and tourism sector of nations. It is because; for maximum
tourists, visiting destinations become affordable if they travel through low cost airlines
which leads to increase its number of travellers and thus, profits of industry.
 Globalisation – Also, globalisation is one of the major drivers of change in travel and
tourism industry as this leads to travel of people from one nation to another which results
in rise in GDP and improving overall economic condition of country. Therefore, with the
same, ultimately level of education and employment in nation also increases.
1.2 Analysing at least two issues of Sri Lanka that are driving change in the travel and tourism
sector
Sri Lanka is known to be a popular destination because of its natural beauty and richness
in terms of rainforest and sandy beaches which serve as the main focus for tourists. The
destination is successful in attracting different tourists who get influenced through culture and
the historical as well as religious impact on same. Since 2012, nation is successful in having an
increase in the number of tourists i.e. more than 1 million (Sultana and Khan, 2018). However,
with growth and success, Sri Lanka is also facing many challenges in its tourism sector which
are like:
2

Figure 1: Tourism in Sri Lanka
(Source: Sri Lanka - Travel and Tourism, 2018)
 Political environment: Tourism sector of Sri Lanka is highly impacted through the
political issues. As nation is having political unrest, thus, the decisions made by
government with respect to policies imposed, advancement of the transport system is
getting affected the most which is leading to decrease the number of tourists in nation.
Also, political stress and conflicts results in bringing changes in the political parties,
decisions made by which influence the business operating in travel and tourism sector of
Sri Lanka to a high extent (Prakash and et.al., 2018).
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Figure 2: Sri Lanka Tourist Arrivals
(Source: Tourist arrivals up by 19 percent in July 2016 Sri Lanka Tourism Board, 2016)
 Terrorism issues: Another issue that is driving change in the tourism sector of Sri Lanka
is of terrorism activities. In the past years, there is high increase in terrorism in this nation
which is leading to impose direct threat on businesses operating within. Over the minds
of tourists, terrorism plays a significant role as they have become concerned regarding
their safety in Sri Lanka because of increasing issues of terrorist activities. Many cases in
nation have been evidenced where the suicide bombers and terrorists targeted distinct
areas where there is large population, especially at tourist attraction points (Kularatne and
et.al., 2018). Thus, these kinds of activities are leading to discourage the people visiting
this nation. Furthermore, debts based on security and safety of destination are increasing
as well.
TASK 2
2.1 Emerging trends that are influencing change in the travel and tourism sector of Costa Rica
Several emerging trends in tourism sector are there that are playing a vital role in
influencing the changes occurring within market. Some of them are given as below:
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 Dark Tourism – Dark tourism has emerged in tourism industry of today’s era to a high
extent. It refers to the travelling of people from one country to another for the purpose of
visiting those destinations which are either popular for death or some kinds of sufferings
(Korstanje, Raj and Griffin, 2018). However, now-a-days, there are many other reasons
too for which dark tourism is known like The Flesh Trade in nations. There are many
countries where having sex with minors is not prohibited and thus, for these kinds of
activities which are actually wrong, people are visiting there.
 Medical Tourism – Medical tourism is basically the medical travel or can say health
tourism where people travel to a nation for some medical procedure. Countries which are
not having very effective medical facilities, people from the nation travel to those having
high quality services. There are some other factors too behind medical tourism like
affordable prices, convenient travel options and short time to wait for the procedure in
comparison to home country (Andriotis, Stylidis and Weidenfeld, 2018).
 Sex Tourism – One of the most common emerging trends in today’s era is sex tourism
which refers to the travelling of people from one nation to another for the sake of sexual
activities, majorly in respect with prostitutes. Sex tourism has now-a-days become a
reason for many travellers to have their trips organized for the purpose of effecting a
commercial sexual relationship with local residents, particularly prostitutes at the
destination (Roudi, Arasli and Akadiri, 2018). Main reasons behind the same are like low
cost for these services in destination country, flexible laws or favourable attitudes
towards prostitution.
2.2 The way emerging trends affect Costa Rica in terms of tourism product and service offerings
Emerging trends like dark tourism, medical tourism, sex tourism, etc. highly influence the
tourism product and service offerings like attractions and accommodations in travel and tourism
industry of Costa Rica. By investing in public transport system, government is encouraging
increase in the number of tourists. Also, with well spread campaigns organised by the tourist
associations in this nation are leading to make the tourists informed regarding services related to
medical and others (Jamil, 2018). Dark tourism basically refers to the kind of tourism that is
associated with places that are famous for either death or suffering. Examples: The River Kwai
Bridge, Thailand, London Dungeon, UK, Cu Chi Tunnels, Saigon, Vietnam and The Zone of
Alienation in Chernobyl, Ukraine, etc. Medical tourism in the nation is proving to be highly
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beneficial for generating revenues as maximum people are travelling for the medical purposes to
Costa Rica (Medical Tourism in Costa Rica, 2018). Nations that are famous for medical tourism
are like Malaysia, Turkey, India, Brazil and Thailand. It can be said that income being generated
from tourism activities can be re-invested in the development of nation along with protecting the
economy against any adverse financial position of the firms operating in travel and tourism
sector.
It can also be said that legal prostitution is a huge benefit to the females who willingly
prefer this profession as in this, they earn far better that the jobs like receptionists, cleaning
ladies, etc. (Costa Rica Prostitution, 2018). In a study made in 2008, it has been found that
European countries have more relaxed attitudes about sex and so, sex tourism is being done on
high pace. While, on the other hand, nations like Bangladesh and Zimbabwe, it is more on
conservative side. Sweden and Iceland also known as the most liberal nations across world for
sex culture. Some more other nations where sex tourism is legal are Switzerland, Spain, Italy,
Greece, The Netherlands, Mexico, India, Australia, Nigeria and China. Growth of tourism
industry of Costa Rica will ultimately result in providing progress to local communities without
making any adverse impact on the culture and environment as this will offer employment
opportunities to local residents as well as support in the sector of education as well. Increase in
revenue in the sector through expansion in hotel sector and aviation industry as well as
enhancing medical facilities will improve quality services accommodation provided to visitors
and thus, it will result in enhancing their overall experience which will lead to repeat their visit in
the nation (Roudi, Arasli and Akadiri, 2018).
TASK 3
3.1 The way British Airways has responded to emerging trends in terms of type of travel and
tourism products offered
Changes are constant with which every firm operating in travel and tourism sector UK
needs to deal. Likewise, British Airways (BA), one of the leading airlines of UK needs proper
structure in its services and business as a whole. In the present era, airlines like BA are facing
different challenges as well as changes taking place in the environment. With adopting suitable
strategies like better alliances will prove to be helpful for company to approach better changes in
markets where firm is operating currently (Evans and Campbell, 2013). British Airways is
getting highly influenced with the changes but, it is responding to emerging trends positively by
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offering quality travel and tourism products in order to satisfy the changing needs of customer
requirements. Strategies like imposing different exchange rates, bringing technological
advancement and increasing the lower rate carriers prove to be highly beneficial for British
Airways as there is increase in the demand over airline travels from the emerging destinations
like France and Belgium (Grundy and Moxon, 2013). The way company responded to emerging
trends can be understood with the help of PESTLE analysis which is given as below:
PEST analysis of British Airways
 Political: Current government legislations and the political unrest highly influence the
activities of BA. Firm is facing the issue of carbon footprint as well as the government
legislations in the security systems are also interrupting the airline to execute its
expansion strategies. Thus, through implementing different exchange rates, company is
maintaining its profits.
 Economic: Further, economic conditions like high taxation and the recession also put
direct impact on the business of BA. This airline had to increase its prices due to rise in
the price of fuel because of rising prices in the global market which affected its profits
(Horner, 2012). To cope up with the same, lower rate carriers were started by company.
 Social: To have increased customer base, British Airways is meeting the changing
patterns of customer requirements like people now-a-days consider airline transport in
leisure perspective and so, for this segment, BA has launched flights in which quality
experience to passengers is provided.
 Technological: By bringing innovation in operations of BA, costs are reduced by the
firm with gaining competitive edge over others (Coleman, 2015). It has implemented e-
commerce system for online bookings and making use of better equipment in the flights
like self-service checking machines.
3.2 Developing strategies on how British Airways could respond to change
British Airways is successfully maintaining second largest position in terms of carrying
the passengers. By adopting strategy of acquisition with financially troubled Dan Air, expansion
has been done by the business. Further, it adopted the strategy of merger in which BA merged
with Iberia to cover the transatlantic routes as well as with American Airlines. Also, many
emerging markets can be approached through merger like China. With the help of these
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strategies, £230 million in annual cost saving is earned by the organisation (Aaker, 2012). Also,
to effectually respond towards changes, BA is emphasizing on long haul markets and valued
services to provide high satisfaction to customers. Major feature enjoyed by British Airways to
gain success is its value added services. This is helping the firm in placing higher cost. Also,
through short hauls services like renovated waiting launch and breakfast, firm can approach
inbound markets as well along with business or economic class (Tang, 2015). Cost carriers have
places a lot of barriers on airlines but through adopting the strategy of setting slower cost over
the long hauls will prove to be highly beneficial for BA. On the other hand, to attract the middle
class tourists, lower price over added value will be helpful. All these strategies are developed on
the basis of SWOT analysis which is given as below:
Strengths
 Having a strong brand identity.
 Customers have high trust and loyalty
towards organisation.
 Gaining the advantage of economies
of scale (Horner, 2012).
 High level of service digitalisation.
Weaknesses
 Major presence in UK only with
overdependence.
 Heathrow airport is having limited
capacity.
 Firm is not gaining high rate of return
on the capital invested.
Opportunities
 Expansion of scope by improving the
relations with unions.
 Having international presence by
expanding in more markets.
 Integration with operating airlines of
IAG
Threats
 Instability with the UK government.
 Employee strikes lead to service
disruptions.
 Terrorism
Strategies which British Airways has used in the last 15 years to effectually respond to
the emerging trends is to launch low cost carriers in response to intense competition so that
customers at large could be grabbed as many airlines that were charging low came into existence
like Ryanair. Also, it emphasized on providing quality services with value in against of what
passengers are paying and operated with a multi-pronged business strategy so that prices can be
justified and customers could be retained for longer span of time by upgrading their experience
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(Coleman, 2015). Apart from that, company has modernised the aircrafts and offered new
services with increasing CSR initiatives in areas of environment like reduced waste and
improved recycling with creating sustainable and responsible communities.
3.3 Justifying strategies used by British Airways to respond to change
British Airways is known for providing high class services with charging premium price
for same. However, it has been seen that currently, the lower cost air services are placing high
competition in travel industry. Further, the short hauls services are putting high competition and
direct impact on company. Thus, to stay in market with sustainability and gaining competitive
edge over others, cost of the services offered are required to be maintained accordingly (Evans
and Campbell, 2013). It can be said that if firm will reduce its prices, this may lead BA to face
consequences like negative impression will build up in the minds of travellers with respect to the
quality it is offering and thus, many lead to reduce the number of potential travellers. To be in
competition and protect itself successfully, placing higher values and facilities will play a crucial
role and bring high customer base. However, to grab attention of customers at a large scale, the
prices of services are required to be lowered down. For the same, firm can offer some discounts
on specific services (Grundy and Moxon, 2013). Alliance or acquisition is one of the best
strategies groups to acquire a wide range of network. Apart from this, technological
advancement and better offering will also prove to be better options for gaining higher profits
and revenues. Overall, it can be said that strategies used by British Airways proved to be highly
successful for organisation as through conducting business responsibly, goodwill of firm has
increased which resulted in enhancing the trust of customers and thus, their number. Along with
that, by creating sustainable and responsible communities, market share of company has
increased in the markets over others and they are successfully enjoying the profits as well as
revenues (Tang, 2015). Initiatives taken by BA to reduce environmental impact has decreased
the risk of actions taken by government against firm as well which led company to run
operations smoothly and attain growth at a fast pace without any hindrances.
TASK 4
4.1 Impacts of issues and trends on the performance of BA
Different trends and issues within the travel and tourism sector of UK have a drastic
impact on the performance of British Airways some of which are described as below:
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 Government actions – Whatever initiatives are made by the government, they bring
direct impact on the functioning of businesses operating in tourism sector. UK
government has made several efforts to promoting tourism by the way of different events
and programs that has provided a lot of opportunities to British Airways. With using
approaches to development and renovation as well as by spending on sport tourism, the
UK government is successful in promoting tourism across world and helping BA to earn
higher profits (Horner, 2012).
 Technology – As tourism sector of UK is giving due consideration on the involvement of
advanced tourism, travel agents or tour operators like British Airways are running their
business efficiently. With the assistance of same, different technologies are implemented
in the distribution channels of BA such as e-commerce.
 Security – In travel and tourism sector, safety and security issues are taken with highest
consideration. Presently, with increase in terrorist attacks, debts over the safety and
security of tourists have enhanced as well. Considering these issues, the UK government
has imposed many norms and policies which are placing strict rules for the foreign
tourists (Coleman, 2015). However, this decreases the motivation level of tourists visiting
the nation as security policies over the visa system are very strict and people have to go
through lots of procedures for getting approval of the same.
4.2 The consequences of firms like BA failing to response to the changing needs
In today’s era, firms are operating in an environment that is all time changing and the
same is applicable to tourism sector of UK. Similarly, firms operating in this sector like British
Airways may have to face a lot of issues in case if they get failed to give response to the
changing needs of market. These consequences can be discussed with the help of Porter’s Five
Forces Model which are stated as below:
Forces affecting business Level of threat/bargaining
power/intensity of rivalry
Reasons and suitable
strategies
Threat of new entrants Low Various barriers to enter in
the aviation industry of UK
are there like high investment
and little differentiation in
products and services.
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Existing companies are
already having high market
share (Horner, 2012).
Threat of substitutes Moderate People desiring low cost
services do not go with BA
while those who want
convenience as well as
quality services choose
British Airways.
Bargaining power of buyers High People are having many
choices to select an airline.
Depending on their price
sensitivity, they make the
decisions (Tang, 2015).
Customers choose BA over
other low cost airlines unless
if they are highly satisfied
with its services or loyal
towards firm.
Bargaining power of
suppliers
High There are very less number of
suppliers available who
supply fuel, airplanes and
labourers. BA needs to
maintain healthy relations
with them to gain their
loyalty and to retain them.
Industry rivalry High Number of competitors in the
UK market like EasyJet and
Ryanair are available. Thus,
BA needs to focus on
convenience of customers and
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quality of services.
 Losing customers – To keep the customers satisfied and retain them for longer span of
time, organisations are required to assess current trends within market along with giving
due consideration on the current demands of customers. In case if firms operating in
travel and tourism sector of UK like British Airways will get failed to respond to these
changes and new trends, business may have to lose the existing potential customer base
as well as it will become unable to attract new ones (Aaker, 2012).
 Financial crisis – If firm will not be successful in positively responding to changes, then
British Airways may have to face the financial crisis. To have sufficient funds to invest
and maintain capital, it is crucial for organisation to deal with the changes effectually.
With the help of analysing changes prior, better decisions can be made based on
overview on the future perspectives (Tang, 2015). Failure in adapting the technological
advancements may also result in create a situation of financial crisis as this will incur
high cost for business and so, competitiveness of firm will get affected.
 Reduced profit – As today’s business environment is highly competitive, for firms like
British Airways that are operating in travel and tourism sector of UK, it is significant to
have strategies places in a proper way so that business can effectually respond to changes
as well as and accept the same with gaining long-term existence and sustainability in
market (Andriotis, Stylidis and Weidenfeld, 2018).
 Growth issues – If British Airways would not be able to adapt with changes and trends
occurring in business environment, grow and expand would not be possible for firm and
thus, losses may have to be suffered. As BA is dealing in tourism sector also, thus, it is
supposed to hire talented and skilled employees so that they can effectually deal with the
technology and customer services as per changing trends (Evans and Campbell, 2013).
 Hampered goodwill and loss of competitive edge – In case if BA would get failed to
adapt to the changes or latest trends of environment, business will most likely to hamper
its goodwill in the market. Also, if BA would not provide quality services to customers as
per the prices charged, they would like to switch to other rivalry firms which will damage
the competitiveness of company.
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 Regulatory issues – Being operating in aviation industry, to give due consideration to the
safety and security of passengers as well as taking care of environment by using eco-
friendly products is of utmost importance for BA as non-compliance or ignorance of
same may lead organisation to face serious consequences from the side of regulatory
authorities like penalty against business (Coleman, 2015).
CONCLUSION
From the above report, it can be concluded that tourism is the fastest growing industry in
Sri Lanka that has increased its gross domestic product with making expenses on tourist goods as
well as services. However, it has been found that the contribution of this sector in country’s
economic position gets highly influenced with the factors like political stability, terrorism threat
and civil unrest. The international tourists coming in the nation are highly considered about their
personal safety. It has also been assessed that adopting strategies like acquisition and merger by
British Airways can make a high contribution in the success of travel and tourism sector by
positively responding towards changes.
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the New Global Market. The Air and Space Lawyer. 28(1). p.1.
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Grundy, M. and Moxon, R., 2013. The effectiveness of airline crisis management on brand
protection: A case study of British Airways. Journal of Air Transport Management. 28.
pp.55-61.
Horner, S., 2012. Business Travel and Tourism. Routledge.
Jamil, G., 2018. Ethno-nationalist Tourism in South Asia. Social Change. 48(3). pp.459-465.
Korstanje, M.E., Raj, R. and Griffin, K. eds., 2018. Risk and Safety Challenges for Religious
Tourism and Events. CABI.
Kularatne, T. and et.al., 2018. Do environmentally sustainable practices make hotels more
efficient? A study of major hotels in Sri Lanka. Tourism Management. 71. pp.213-225.
Prakash, S.L. and et.al., 2018. Reasons for visitor dissatisfaction with wildlife tourism
experiences at highly visited national parks in Sri Lanka. Journal of Outdoor Recreation
and Tourism.
Roudi, S., Arasli, H. and Akadiri, S.S., 2018. New insights into an old issue–examining the
influence of tourism on economic growth: evidence from selected small island
developing states. Current Issues in Tourism. pp.1-21.
Siyambalapitiya, J., Zhang, X. and Liu, X., 2018. Green Human Resource Management: A
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Production.
Sultana, S. and Khan, R.S., 2018. Factors determining Tourism: A Framework to promote Tea
Tourism Destination in Chittagong. Global Journal of Management and Business
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Tang, R.Y., 2015. International air service controversies: frequently asked
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Costa Rica Prostitution. 2018. [Online]. Available through:
<http://www.sanjosecostarica.com/costa-rica-prostitution/>.
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<https://www.anywhere.com/costa-rica/travel-guide/medical-tourism>.
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<https://www.export.gov/article?id=Sri-Lanka-Travel-and-Tourism>.
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