Contemporary Issues Travel and Tourism sector Assignment

Contemporary
Issues in Travel and
Tourism

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1..........................................................................................................................................1
1.1 Current issues leading to bring change in travel and tourism sector...................................1
1.2 Analysing two issues in travel and tourism sector of Costa Rica........................................2
TASK 2..........................................................................................................................................3
2.1 Evaluation of the emerging trends that bring change in travel and tourism sector..............3
2.2 Impact of these trends on Costa Rica in terms of tourism product and service offerings....4
TASK 3..........................................................................................................................................5
3.1 Analysing the way British Airways has responded to the emerging trends.........................5
3.2 Strategies to respond to change in British Airways.............................................................6
3.3 Justification on the selected strategies................................................................................7
TASK 4..........................................................................................................................................8
4.1 Impacts of issues and trends on the performance of British Airways..................................8
4.2 Challenges faced by British Airways if get failed to respond to the changing needs...........8
CONCLUSION.............................................................................................................................10
REFERENCES............................................................................................................................12

INTRODUCTION
World is changing at a rapid pace in today’s scenario including all industries. However,
travel and tourism is that sector which is growing at a high rate but along with same, there are
many issues and challenges which it is facing. Firms operating in this industry are needed to
move their strategy in direction to stay in market for longer span of time with effectually dealing
with the present contemporary issues (Beck, 2017). In present study, the chosen destination is
Costa Rica and selected organisation is British Airways (BA), UK which is one of the largest
airlines on the basis of their fleet size with reference to which many concepts related to
contemporary issues in travel and tourism sector will be discussed. There will be study on
current issues and trends in travel and tourism industry along with highlighting the way sector
responds to change and their impacts.
Profile of Costa Rica
Costa Rica is known as one of the fastest growing economies where tourism is the
leading sector in terms of revenue generation. This industry is contributing around 12.5% of the
total GDP of nation and playing a significant role in generating employment i.e. around 11.7%
directly as well as indirectly. Tourism industry in Costa Rica is also helping to reduce level of
poverty. Nation is known for its popular nature travel destinations like Cocos Island and Poas
Volcano Crater and gaining the competitive advantage from its protected areas and national
parks over other countries (Facts about Tourism in Costa Rica, 2018). Costa Rica is blessed
with rich variety of flora and fauna which is estimated 5% of the total biodiversity across world.
Maximum travellers visiting this nation come for activities related to ecotourism as well as to
have adventurous experience. However, along with so many positives, there are some
limitations or challenges associated with travel and tourism sector too that are leading to create
consequences for the nation (Corsale and Vuytsyk, 2018). Below, there will be discussion on
issues being faced by travel and tourism sector of Costa Rica and emerging trends that are
driving changes in terms of tourism product and service offerings.
TASK 1
1.1 Current issues leading to bring change in travel and tourism sector
Various issues are there that are driving changes in the travel and tourism sector. With
having rich culture and heritage, nations are known for their tourism but there are some issues
which give direct impact on the economic scale and GDP of destination. Some of the most
common among all are:
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 Terrorism – Although, there are many places which never had cases related to
terrorism but there is always risk for same as attacks cannot be ruled out and in travel
and tourism sector, since past years, there is threat of terrorism activities. This industry
always has threat from terrorism as terrorists mainly target the areas that are associated
with travel and tourism due to having large crowd there (Wright and Sharpley, 2018).
One of the most common examples for same are suicide bombers and attacks in
Tunisia, Pakistan, Jakarta and Paris mainly in commercial areas.
 Technology – With globalisation, major concern for nations has shifted towards
technological changes that are happening at a fast pace. Travel and tourism sector is
getting impacted through change in technology and thus, firms operating there need to
bring modifications in their business practices because of technological implementation
(Sheehan, Grant and Garavan, 2018). Information and knowledge are getting highly
influenced with new technological developments as with same, e-commerce has
emerged with which firms are trying to adapt the customer oriented approaches.
 Low cost airlines – In tourism industry, low cost airlines play a significant role in
increasing its profits and revenues. This is proving to be one of the crucial issues which
travel and tourism sector of nation needs to keep in mind as due to same, number of
travellers visiting nation are getting affected. It is required to increase the low cost
airlines to increase customer base but with rising cost of fuel, to maintain profits with
same is difficult (Beck, 2017). Thus, airlines operating in this industry are required to
take this challenge into consideration and search for suitable ways to deal with it.
1.2 Analysing two issues in travel and tourism sector of Costa Rica
Costa Rica is enjoying lots of benefits in nation from the travel and tourism sector.
However, two main issues are there which are creating concerns for the sector. These are:
 Globalisation – Globalisation is playing the most important role in influencing industries
in which travel and tourism is one of the major one which is getting highly affected due to
the same. There are many positives of globalisation which made this sector to boost the
growth like mobility of visitors across the globe and ease of travel. However, there are
many issues associated with same among which the most common is failure of domestic
organisations due to entrance of foreign companies in nation (Globalization and the
Tourism Industry, 2017). Further, issue of terrorism, safety and security also increased
with globalisation. Also, environmental trends cannot be ignored as with high travel and
tourism, climate is changing rapidly in the form of drought, floods and tornadoes which
are affecting the life.
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 Political Unrest – There is high political unrest in Costa Rica which is affecting the
goodwill and reputation of nation as a tourism destination. Due to this reason, travellers
are getting demotivated and so, their number to visit the nation gets reduced as political
instability creates fear among them. Government in Costa Rica’s is facing struggle with a
deficit that is estimated around 7.1% in the total GDP of current year (Khoo-Lattimore
and Yang, 2018). Also, local riots and financial crisis has taken place here which
decreased the arrivals of tourists in the recent years. Thus, travel and tourism sector in
Costa Rica is facing many issues due to political unrest in nation.
TASK 2
2.1 Evaluation of the emerging trends that bring change in travel and tourism sector
There are many trends which are emerging in the travel and tourism sector of Costa
Rica and leading to bring several changes. Some of these are like:
 Dark Tourism – Dark tourism can be referred as an act of travel and visit to sites which
are known for either deaths or sufferings. However, it also includes the negative sides of
tourism for which people visit a nation. It has been in trend from many years which
fascinate tourists to visit the destination (What exactly is Dark Tourism?, 2016). There
are many other reasons too because of which tourism of a nation is called to be dark like
if some illegal practices are being carried out there such as prostitution, the flesh trade
including sex with minors, etc. Various nations are there across world in which these
practices are being carried out due to absence of strict laws and for the same, people
from other countries visit there (Weaver and et.al., 2018). For example: The River Kwai
Bridge, London Dungeon, UK and Thailand.
 Medical Tourism – This is a kind of tourism which is done by a nation with an aim to
improve the health of visitors. There are many places in world where people come and
go to have health treatments because of better facilities and doctors available in
comparison to their home countries. Thus, for specific medical procedures for which a
nation if famous, people visit there to have high quality treatment. However, this is not
the only reason behind medical tourism as there are many other purposes too like
affordable cost of services, convenient options to travel as well as simple and short
process to wait as compared with the home country (Morgan, Harrill and Dioko, 2017).
For example: India, Brazil, Malaysia, Costa Rica, etc.
 Grey Tourism – Grey tourism is basically the niche market in industry of travel and
tourism that is for senior travellers. Many aspects are involved in same like medicinal
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where there is loss of health or physical fitness, economic that relates with retirement,
social i.e. grandparents, etc. Majorly, it involves people who are 60 years old or above
that come under grey tourism. However, in some cases, the age of seniors has come
down to 50 years (Colantonio, 2017). Now-a-days, it has come into trend by travel and
tourism industry to target this segment of customers who have different reasons and
motivation to visit a nation. In Europe, it is believed that seniors who are healthy, have
free time and active make high contribution in the future of tourism market. For example:
Nations actively involved in grey tourism are Australia, Malaysia, etc.
2.2 Impact of these trends on Costa Rica in terms of tourism product and service offerings
In terms of tourism products and service offerings, emerging trends like dark, medical
and grey tourism put direct impact on Costa Rica which is famous for its pristine beaches,
natural and scenic beauty as well as rich culture. On the other hand, there is one major dark
side in tourism sector of this country i.e. The Flesh Trade. This aspect of dark tourism directly
impacts the products and services of tourism sector like attractions and accommodation as
when people come for purposes like prostitution, they avail the services to stay which generates
profits (Facts about Tourism in Costa Rica, 2018). But, on the other hand, it leads in rise in
these kinds of illegal activities which are not good for culture and image of the nation. Further,
with medical tourism, travel sector of Costa Rica is gaining higher profits as majorly people from
US especially Americans come here for medical purposes because of affordability as well as
better doctors and dentists which leading to generate higher revenues. With the same, nation is
becoming able to re-invest the income being generated from medical tourism which in turn
resulting in improving the living standard of local citizens (Corsale and Vuytsyk, 2018). Apart
from that, grey tourism is presently not in trend in Costa Rica but if it will start following the
same, this would result in enhancing the revenue that would help tourism industry to grow with
expanding and helping the economy to develop.
TASK 3
3.1 Analysing the way British Airways has responded to the emerging trends
The way BA has responded to emerging trends in terms of type of travel and tourism
products offered with an aim to meet the changing needs of customers can be understood with
the help of conducting PEST analysis which is stated as below:
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Figure 1: PEST Analysis
 Political factors – As there is political unrest in the UK after Brexit, fluctuation in
government regulations are affecting the activities of British Airways. Major issues which
company is facing are that of carbon footprint and security systems that are hindering
the expansion plans of business in other nations due to changes in government
legislations. Therefore, for dealing effectually with same, organisation can implement
different exchange rates.
 Economic factors – In the UK, main economic issues are recession and high taxation
which are making BA unable to earn profits to the extent it should. This is the reason,
firm is needed to set high prices for services it offers (Upton, Schänzel and Lück, 2018).
Also, there is increase in price of fuel at the global level which directly affects the
revenues of organisation. To handle this issue, BA was required to start low cost
carriers.
 Social factors – For customers now-a-days, travelling through airline is a leisure
perspective for which company has launched many flights that offer high quality
experience with additional benefits. However, prices for the same are high.
 Technological factors – With emergence of advanced techniques in market, BA has
brought innovation in its services through improved operations (Sharpley, 2018). It has
adopted techniques like e-commerce system to give customers convenience to books
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PEST
Analysis
Political
Social
Economi
c
Technol
ogical

tickets online and save their time through use of better equipment like self-service
checking machines.
3.2 Strategies to respond to change in British Airways
To frame suitable strategies to give proper response to changes in pattern of customer
requirements, conducting SWOT analysis will help as on the basis of same, strategies will be
developed.
SWOT Analysis
Strengths
 Leading firm with having a strong
brand name.
 Gaining higher profits and revenues.
 Has brand loyalty of customers.
 Economies of scale is the main
strength.
 Known for its high quality services
(Coleman, 2015).
Weaknesses
 Over dependent on the UK market
only.
 Gaining less rate of return on
investment of capital.
 Political unrest in the UK.
 Limited capacity for passengers at
Heathrow airport.
Opportunities
 Can expand in new markets through
getting integrated with the airline of
IAG.
 Scope of business can be increased
through making healthy relations with
unions.
Threats
 Increased prices of fuel.
 Intense competition.
 Service disruptions because of
employee strikes.
 Strong British currency.
 Racial attacks against travellers
(Horner, 2012).
If BA will adopt the strategy of acquisition with Dan Air which is financially not so strong,
it can easily increase the scope of business. Also, merger would prove to be helpful with
American airlines and Iberia which will lead to cover the intercontinental routes. Further, on the
basis of weaknesses identified above, if BA will focus on long haul markets and valued services,
it can offer high customer satisfaction. To avail the opportunities available in market, British
Airways can provide value added services to target market by which higher cost can also be
placed (Tang, 2015). Considering the threats, if company will offer short haul services like
renovated waiting lunch and breakfast, to grab the inbound markets will become easy with
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focusing on business or economic class. Apart from that, by setting lower cost over the long
hauls, middle class tourists can be attracted by charging lower price over added value.
3.3 Justification on the selected strategies
British Airways is maintaining the second largest airlines since a long time with offering
high class services and charging premium price from customers. But, presently, competition has
increased and there is emergence of many low cost airlines. Also, through short haul services
provided by them, company is getting directly affected. For BA, to sustain for longer span of
time and beat the competition, prices of products and services offered are to be charged
keeping in consideration the strategy of rivalries. However, charging low prices may affect the
business with respect to the perception regarding quality offered. This may result in result in
decreasing the profits ultimately (Wright and Sharpley, 2018). Thus, only way to gain success
over others is to provide high quality and value to customers. However, some discounts on
specific services can be offered which would not hamper the profits. It can be said that
acquisition or merger prove to be the best strategies to capture market and customers at large.
TASK 4
4.1 Impacts of issues and trends on the performance of British Airways
Performance of British Airways gets highly impacted through issues and trends
prevailing in market as they are responsible for bringing changes in travel and tourism industry.
These impacts can be positive and negative both. Some of these are like:
 Initiatives taken by government – Actions made by government of UK places high
impact on the operations of BA as they are promoting tourism through various events
and programs which are resulting in improving the relations in between UK and other
countries. This is increasing the business of BA in terms of increased customer base,
profits and revenues as well as enhancing employment opportunities in the nation
(Sheehan, Grant and Garavan, 2018). Government is also making investment on sports
tourism which is helping travel and tourism industry to earn more and thus, BA is also
getting the advantage from same.
 Rise in safety and security – Being operating in travel and tourism sector, it is crucial
for BA to give due emphasis on the safety and security of passengers. As there is high
risk of terrorism activities now-a-days, firm needs to take strict security measures so that
customers can be protected against the same. However, UK government has made
various regulations to safeguard the foreign tourists which BA has to comply with (Khoo-
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Lattimore and Yang, 2018). But, these regulations are leading to reduce the number of
travellers as visa policy in nation is highly strict with involving lots of formalities.
 Technological advancements – With the latest trend of e-commerce, travel agents or
tour operators like British Airways are gaining a lot of benefits through implementing the
same in distribution channels. Likewise, there are many other advanced techniques
which BA is using to attract customers at large by providing convenience and value to
them (Colantonio, 2017). This is supporting business to gain higher profits and
sustainability for longer span of time.
4.2 Challenges faced by British Airways if get failed to respond to the changing needs
In case if British Airways will get failed to properly respond to the changing needs of
market, various consequences are there which it will have to face. These can be understood
with the help of Porter’s Five Forces Model through which forces will be discussed which are
affecting business at low, moderate or high level along with their reasons and suitable
strategies.
Porter’s Five Forces Model
Figure 2: Porter's Five Forces Model
 Threat of new entrants – In the airline industry of UK, threat of new entrants is low as
government has imposed many strict norms and policies and so, there are plenty of
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Rivalry among
existing firms
Threat of new
entrants
Bargaining power
of buyers
Bargaining power
of suppliers
Threat of
substitute
products or
services

barriers to enter in the market. In aviation industry, making huge investment is an
important part which restricts the new firms to enter as well as already existing airlines
like BA already have high market share. Further, very little product and service
differentiation is there which makes firms unable to gain a competitive edge over others
(Coleman, 2015). This factor creates issues for British Airways as well because if no
differentiation will be there in offerings of BA, to retain the customer base in not possible
that will lead to incur losses.
 Threat of substitutes – As there are not many firms present that are giving threat to
British Airways in terms of similar products and services but being in the airline industry,
providing high differentiation is not possible which always involves the risk of switching
of customers from one airline to another. Thus, it can be said that threat of substitution is
moderate in case of BA and to deal with the same, firm needs to provide high value to
customers in return of what they spend by availing services offered by company (Horner,
2012). Also, they need to provide high convenience to customers so that they would
select BA over other competitor organisations.
 Bargaining power of buyers – In airline industry, people now-a-days have many
choices to select the firm which proves to be best suitable for them in terms of cost and
convenience. Little change in price can affect customers to a high extent. Therefore, it
can be said that bargaining power of buyers is high in BA. Company is required to take
care of the price sensitive buyers in this case and need to set the prices on the basis of
what rivalry firms are charging. However, if price charged by BA is not acceptable by the
customers, it may adversely affect the profits of business (Tang, 2015).
 Bargaining power of suppliers – As there are very limited suppliers available in the
airline sector who supply labourers, raw materials and airplanes, so their bargaining
power is high. Thus, British Airways has no option other than maintaining healthy
relations with its suppliers to have timely supply of goods at their desirable cost. To pay
as per what suppliers demand is necessary for BA to make them stay with firm in long
run. However, some negotiation can be made.
 Industry rivalry – British Airways is facing high intensity of industry rivalry from both;
domestic and international airlines (Sharpley, 2018). At the global level, competition is
present based on price that firms are charging as well as services and convenience they
are offering. Therefore, to remain in the competition in long run, it is vital for firm to
maintain their quality and market value.
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CONCLUSION
From the above report, it can be concluded that travel and tourism sector in today’s era
is facing different contemporary issues in business environment. This sector is one of the most
important contributors in economic scale of nations. It has been found that Costa Rica’s sector
of travel and tourism is growing at a fast pace and helping nation to develop but issues like grey,
sex, dark and medical tourism are its negative sides which creates issues for the image of
nation as well. Further, emerging trends in nation line eco-tourism and sustainable tourism are
playing a vital role in increasing the profits by grabbing attention of customers at large. It has
also been assessed that airlines like British Airways need to give positive response to the
changes in market to stay for long with earning profits. However, their failure may lead them to
face financial crisis.
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REFERENCES
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Beck, L., 2017. RTM 404 Cross Cultural Perspectives of Tourism.
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Special Period. Routledge.
Coleman, M., 2015. Regulatory Responses to the Challenges Facing Large European Carriers
in the New Global Market. The Air and Space Lawyer. 28(1). p.1.
Corsale, A. and Vuytsyk, O., 2018. Jewish heritage tourism between memories and strategies.
Different approaches from Lviv, Ukraine. Current Issues in Tourism. 21(5). pp.583-598.
Horner, S., 2012. Business Travel and Tourism. Routledge.
Khoo-Lattimore, C. and Yang, E.C.L., 2018. Asian Youth Tourism: Contemporary Trends,
Cases and Issues. In Asian Youth Travellers (pp. 1-13). Springer, Singapore.
Morgan, N.J., Harrill, R. and Dioko, L., 2017. Travel and Tourism in Film and Literature: A
Critical Review. Critical Tourism Studies Proceedings. 20(1). p.50.
Sharpley, R., 2018. Responsible volunteer tourism: tautology or oxymoron? A comment on
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pp.96-100.
Sheehan, M., Grant, K. and Garavan, T., 2018. Strategic talent management: A macro and
micro analysis of current issues in hospitality and tourism. Worldwide Hospitality and
Tourism Themes. 10(1). pp.28-41.
Tang, R.Y., 2015. International air service controversies: frequently asked
questions. Congressional Research Service. pp.7-57.
Upton, A., Schänzel, H. and Lück, M., 2018. Reflections of battlefield tourist experiences
associated with Vietnam War sites: an analysis of travel blogs. Journal of Heritage
Tourism. 13(3). pp.197-210.
Weaver, D. and et.al., 2018. Dark Tourism, Emotions, and Postexperience Visitor Effects in a
Sensitive Geopolitical Context: A Chinese Case Study. Journal of Travel
Research. 57(6). pp.824-838.
Wright, D. and Sharpley, R., 2018. Local community perceptions of disaster tourism: the case of
L'Aquila, Italy. Current Issues in Tourism. 21(14). pp.1569-1585.
Online
Facts about Tourism in Costa Rica. 2018. [Online]. Available through:
<https://visual.ly/community/infographic/travel/facts-about-tourism-costa-rica>.
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Globalization and the Tourism Industry. 2017. [Online]. Available through:
<https://www.globalization101.org/globalization-and-the-tourism-industry-2/>.
What exactly is Dark Tourism?. 2016. [Online]. Available through: <http://www.tourism-
master.com/2008/10/29/what-exactly-is-dark-tourism/>.
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