Travel & Tourism: Historical Development, Economic Policy & Impacts

This report provides a comprehensive analysis of the travel and tourism sector, focusing on key historical developments, the structure of the industry, and the roles of government and international agencies. It examines the influence of local and national economic policies, discusses the implications of political changes, and explains factors affecting tourism demand and supply. Furthermore, the report evaluates the economic, environmental, and social impacts of tourism, both positive and negative, and suggests strategies to minimize the negative impacts while maximizing the positive ones. The analysis covers aspects such as technological advancements, socio-economic changes, innovation in product development, and the impact of political and economic policies on the tourism sector in the UK and other countries. The report also touches upon the role of transportation, attractions, travel agents, and tour operators in shaping the tourism industry.

Contents
Introduction......................................................................................................................................1
Task1................................................................................................................................................2
P1.1 – Explain key historical developments in the travel and tourism sector.............................2
P1.2 – Explain the structure of the travel and tourism sector.....................................................3
Task2................................................................................................................................................4
P2.1 – Analyze the function of government, government sponsored bodies and international
agencies in travel and tourism......................................................................................................4
P2.2- Explain how local and national economic policy influences the success of the travel and
tourism sector...............................................................................................................................5
P2.3- Discuss the implications of political change on the travel and tourism sector in different
countries.......................................................................................................................................6
Task3................................................................................................................................................7
P3.1- Explain factors affecting tourism demand..........................................................................7
P3.2- Explain how supply has changed to meet the effects of demand.......................................8
Task4................................................................................................................................................9
P4.1 – Evaluate the main positive and negative economic, environmental and social impacts of
tourism.........................................................................................................................................9
P4.2 - Explain strategies that can be used to minimize the negative impacts while maximizing
the positive impacts....................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................11

Introduction
In the GDP of UK, 33% contribution is given by the travel and tourism industry which shows
that how tourism destinations are famous in the UK. In today business, most of the employment
is created by the tourism industry because of this factors the tourism industry is booming
industry and growing up day by day. In the UK, almost the profit of the country is generated by
the tourism industry. The structure and culture of the industry have improved a lot since 2004.
The condition before 2004 was not good because of recession and in this period stakeholders was
not taking interest and not investing as well. Almost 4% forecast increased in the tourism
industry as per the data of UNWTO. On the behalf of this information in this entire study, there
are many important topics which are related with the tourism industry will be covered. In this
whole study we will focus on some important and necessary things such as structure of the
tourism industry, historical development in the industry, what is the impact of technological,
demographical and economic factors on tourism industry and how these factors affected the
business of the tourism sectors, impacts of political changes, how supply and demand factors
affecting the tourism demand etc. will be covered in this entire study.

Task1
P1.1 – Explain key historical developments in the travel and tourism sector
Some key historical developments in travel and tourism industry: In a current global
business world the famousness of the travel and tourism sector is growing very fast because this
industry is known for its adventures and beautiful activities. As per the data of tourism industry
almost 3% to US$6.6 trillion is contributed in the GDP of UK by this industry at the same time
almost 5 million employment created by this industry per year.
The list of historical changes given below:
Technological developments: After the Second World War the technological development has
more increased in the travel and tourism industry in the UK and worldwide. Because of
technological development the travel and tourism industry growing up very fast this has very
high and positive impact across the world. It is observed by the researchers that the profit of the
industry increased and continuously increasing day by day apart from this international tourism
also increasing because of technological development. In today internet world, everyone is
connected with the internet one can enquire the information related to tourist destinations and
book their ticket online (Puczko, 2014).
Socio-economic changes: In the socio-economic changes in the tourism industry ownership of
cars increased this factor allows travelers to travel whenever they want, Because of increasing
the car ownership the profit margin of the industry increased and there is the possibility to visit
the place conveniently. Car ownership provides the freedom and flexibility to people which they
can utilize for their valuable time (Puczko, 2014).

Innovation and product developments: After 1945, which is known as Second World War,
after this time there was the huge development in the tourism industry. In today business world,
the tourism industry is booming day by day because of development is going on in holiday's
packages, resorts, hotel, and camps. All these factors are interrelated which fulfills the demand of
tourism industry services.
The merger of the first choice and Thompson Holidays: In 2007 Thompson holidays is
merged with the first choice both the companies are owned by the TUI group. At present huge
profit is making by the both of companies at the same time both the company's biggest tour
operators worldwide (Clarke, 2012)
Social factors developments: After 1960 it is observed that the level of education has much
increased in all the sectors of society which increased the awareness of tourism sectors
worldwide. Meanwhile in the free time or during the holiday’s people enjoy through visiting the
famous tourist destinations.
In the context of London, travel and tourism industry has well developed under which various
historical development has been made. People started taking more interest in tour as organizers
arranged tours basics of journey along with places for eat and sleep. In the London , people are
more interested and afford started to visit seaside towns spa. People are curious to visit at
historical place due to the increased education , income level, etc.
P1.2 – Explain the structure of the travel and tourism sector
The structure of tourism industry is very wide and there are many components which are known
as tourist destinations such as Alton tower and many other attractions which make it most
popular, Some of the important sectors which are known as the structure of the tourism industry
(Clarke, 2012).
Transport: In the tourism industry the role of transportation is quite crucial because this sector
increases the importance of tourism attractions. With the help of private companies, the rail
network is becoming more convenient. In the UK, almost 5 million of tourist uses the rail
network to visit the destination.

Attractions: Attraction there are two types of attractions one is natural and another is natural.
Some natural attractions such as the lake, district, Black pool etc. these are the attractions which
almost 6 million tourists visited per year, while on the other hand man-made attraction such as
Alton tower is one of the most popular tourist destination which also visited by the 4 million
people per year.
Travel agents: basically brochures of the tourism industry are selling them, the role of travel
agents in the industry is known as the mediator. Travel agents' commission depends on the
business which is carried out by the tourism industry (Horner, 2012).
Tour operators: Accommodation and transportation are offered by the tour operators. Mostly
holiday packages are selling by the tour operators at the same time some famous list of tour
operators such as Thomas cook and Thompson have their own hotels and resorts which make the
tourism industry more famous across the world (Clarke, 2012).

Task2
P2.1 – Analyze the function of government, government sponsored bodies and international
agencies in travel and tourism
The role of government and sponsored bodies in UK tourism: The role of UK government in
tourism is very important and phenomenal. Some of the activities such as stability, mobility in
the tourism sectors are increased by the government. The impact of the government in tourism is
philosophically and economically which increase the growth of the sector. Apart from this
growth chart of the tourism industry, improvement and development criteria are developed by
the sponsored bodies and local government. At the same time, for the better future growth of the
tourism industry UK governments invest money so that facilities and destination promotion can
be done in the effective manner (Horner, 2012).
The role international agencies: There are many numbers of international agencies which work
for the tourism industry in the UK. It is the booming industry which became popular now a day

because of the incredible role is played by the international agencies. While on the other hand the
role of international agencies in the UK tourism also important because in the GDP of the
country huge contribution given by the international agencies.
The role of UNWTO in UK tourism: Global code ethics for the tourism industry is encouraged
by the UNWTO. While on the other hand some negative impacts minimized by the UNWTO.
This is leading organization in tourism which promotes the development and economic growth
drivers at the same time UNWTO also supports the sustainable environment (Horner, 2012).
Training and education, tourism policies and instruments and other competitive advantage and
knowledge are sustained by the UNWTO.
P2.2- Explain how local and national economic policy influences the success of the travel
and tourism sector
Economic and national policies influence the success of tourism industry in many ways.
Some of the ways are given below:
An economic policy of the UK country is formed by the government which has the direct impact
on the tourism industry. Mainly the economic policies are formed by the government to
explicitly of the tourism sector. For instance: if UK government allows the subsidy on the new
building which is situated on the beach town this factor will be beneficial (Enotes, 2011).
The impact of the economic policies on the tourism indirectly as well, for instance: is monetary
policy of the UK government is the cause of rate of exchange for its currency to fall there will
benefit in the tourism sector, Because the rate of the currency will be cheaper because of this
vacations will become inexpensive for the travelers in the country as well.
The national and economic policy of the UK country helps to promote the tourism sectors
activities which directly impacts on the local communities. At the same time, the development
and renovation of the tourism sector also managed by the national and economic policies of the
country. After 2000, the Trade and globalization kinds of things increased a lot which increase
the growth rate and popularity of the tourism industry (Enotes, 2011). Development and how to
sustain the development for a long time is only possible with the help of national and economic
policies of the UK country. At the same time, macro and micro factors also impact on the
tourism sectors not only impact on the tourism but contribute in the success of the tourism sector.

In the economic contribution of the tourism sector, subsidies, and taxes, structure of the tourism
also influenced by the national and economic policies of the UK country. Economic viability is
an essential element of this sustainability. Government play significant role in success if tourism
sector after knowing the importance if this sector. positive changes in economic policies
influence this industry. The tourism industry works with a number of governmental department
and bodies so that they get the full potential of visitor economy.
P2.3- Discuss the implications of political change on the travel and tourism sector in
different countries
The impacts of the political changes have very serious impacts on the tourism sector. There are
some radical changes in politics which can become the cause of fear, safety and security of the
tourists. In the case of Thailand, there are many resorts and a beach which makes Thailand
popular in the tourism industry. But in the Thailand the % of unrest in political changes is very
high and this factor directly affects the tourism sectors in negative aspect (Tribe, 2005).
At the same time, there is the impact on the tourism sectors by the home country political
changes. For instance: the Cuba is famous worldwide in terms of tourism popularity, but there is
a restriction on travel for US citizens this factors has the very high negative impact on the
country tourism which also reduces the growth of the tourism sector of Cuba (Tribe, 2005).
Changes In the political department of the country has positive and negative impacts on the
tourism sectors. Whenever political changes happens the changes also happens in the tourism
rules and policies which affect the growth of the tourism in positive as well as in negative ways.
There are many countries such IRAN which is famous for its cultural programs and diverse
attractions but due to sudden changes in political sectors affect the tourism of the IRAN which
has very negative impacts on the country. At the same time, Mexico also affected by the unrest
political changes (Pérez, 2006).
Political changes can make a huge effect on the tourism sector of a country. These changes in the
home country of tourist can also have an impact on the tourism industry of other country. The
attractiveness of a country can be increased or decreased by political changes and it depends on
the types of change that the number of tourist will increase and decrease.

Task3
P3.1- Explain factors affecting tourism demand
Some of the factors are given below which affects the demand of the tourism industry at TUI
group.
Demographical factors: In the UK the role of demographical factors on tourism demand is very
high. The future and shape of the tourism industry are rolled out by the demographical factors.
Entire workforce and structure of the industry depend on this factor. Demographical factors are
known as the growth of the population, labor migration, longevity increased and declining
fertility rate. All these factors have a huge impact on the tourism industry in the UK because the
business of the industry fully depends on these factors. Generally these factors occur gradually
which shapes the future of the tourism demand, Retirement, health, income rate and other
activities also known as the demographical factor. (Chris, John, Fyall and Wanhill 2005)These
factor affect the demand of this industry because customer select the destination of tourism
according to their choice, preferences, incone level, budget etc. Different customer like to visit at
different place according to their choice and preferences.
Technological factors: day by day the technology is changing and this affects the demand of the
tourism industry. Technology has changed the style of the business operations in every industry
with the help of new innovation traveler can search about the popular destinations across the
world. In the tourism industry, almost 75% cost of migration is reduced by the technological
factors which are the biggest change ever. Telecommunication and the internet become most
popular in this industry and tourist can use these modes for the better lifestyle in the tourism.
Influence of currency exchange rates: In UK the tourism demand is determined by the
exchange rate. The currency demand always influenced by the economic growth of the country, a

rate of inflation and rate of interest. There is long list of factors which affects the demand of the
tourism industry. These factors are known as an inflation rate of the UK, interest rate,
speculation, the balance of payments, the debt of government and government interventions. All
these factors are very important for the economic growth of the UK tourism industry, these
factors have the huge impact on the industry almost the business of the UK tourism is carried out
by these factor.
Economic factor: The tourism industry must identify and fulfill the demand of the tourist by the
specific market. With the help of economic factors, the tourism industry professional in the UK
can take the beneficial decision and makes it more productive. Economic factors such as
employment, inflation, consumer confidence and rate of interest affect the tourism industry
entirely.
POLITICAL STABILITY: The term political stability is related with the UK political policies.
The impact of the political stability on the UK tourism is very high because of changing rules
and regulations. The impact of political stability is positive sometimes it’s negative as well. All
the rules and procedure regarding the visa procedures are decided by the political parties if they
will be simple then tourism demand will increase (Pérez, 2006).If government charge the high
interst rate from the TUI group then it will charge the high price from tourist for the travelling
facilities. This will directly affect the demand of travel and tourism.
Globalization factor: From last few decades the term globalization becomes the leading
concept in the tourism business. The life of the business, an economy of the business,
government and society in different ways are affected by the phenomenon. Whenever these
kinds of change arise there will be more competition in the tourism industry. The level of the
competition is increased by the globalization which reflects on the tourism industry services and
products. In the globalization factors, a consumer has large no of choices regarding the products
and services of the tourism industry in the UK (Chris, John, Fyall and Wanhill 2005).
P3.2- Explain how supply has changed to meet the effects of demand
Supply: attractiveness of the tourism industry is determined by the supply factors and other
inventory supply resources which are known as natural attractions, accommodation, recreation
establishment and culture of the industry. Basically, a supply of the tourism industry depends on
the admission, popularity of the tourism destination, accessibility and seasonality. Positive and

negative both kinds of impacts by the supply, investment, economic growth, employment, and
conservation are the positive impacts of supply on tourism industry while inequality, water cycle
damage, environmental damages are known as negative impacts.
Economic Impact: when then UK federal reserve policy increase the more money spent by the
consumer in relation to tourism industry (Pérez, 2006). The demand of the tourism services and
products increased visa Versa. Because of increasing policy tourism companies increase the
production of good so that demand can be meet the consumer needs.
Local Impact: Goods or services both are provided by the tourism industry to consumers.
Supply factor affects the revenue from the market. For instance: when hotel increase the price of
the room in the winter season due to limited supply the business affects globally, due to this
factor there is increasing in the price of transportation because of the high demand by the
consumers (Chris, John, Fyall and Wanhill 2005).

Task4
P4.1 – Evaluate the main positive and negative economic, environmental and social impacts
of tourism
Economic impacts: The impacts of economic factors on UK tourism positive as well as negative
but it depends on the tourism activities. Motivation and primary things are influenced by the
economic factors. As per the data of WTO almost US$ 478 billion spends by the tourists (Hall,
Hutchinson, Purcell, Terry and Parker 2009). An economic factor helps to boost up the
overall growth of the tourism sector in the UK at the same time it also encouraged the
employment. From this point of view, the impact of the economic factors is positive on the
tourism but while on the other hand inflation is the part of the economic part due to inflation then
there is the increase in prices of tourism sector which will decrease the travel. In order to
minimize the negative impact of ecomnnomic factor, company should conduct effective market
analysis and according to the income level and economic condition of country prices should be
set for travel and tourism services.