Environmental Analysis Australia 2022

RUNNING HEAD: ENVIRONMENTAL ANALYSIS
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Environmental Analysis

Environmental Analysis
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Introduction
Flight Centre Travel Group operates in the travel industry and becomes the largest travel
agency in the segment in Australia. The company headquartered in Australia and founded in
1982. At present, Flight Centre Travel Group has 2,800 offices and stores under many corporate
brands and retail brands (FCTG,2020). The company has a presence across many countries such
as the US, India, the UK, Singapore, and the UAE. Further, the company has a travel license for
80 countries under the brand FCM travel solutions. In the travel segment the company has the
following brands; the Liberty travel, GOGO, Student Universe, ciEvents, Corporate traveler, and
Campus traveler (Annual Report,2019).
PESTLE Analysis
Businesses are mainly influenced by the environment in which they operate. All the
situational elements which determine day to day environment impact business operations. Due to
that, businesses analyze the environment in which they operate in order to identify opportunities
and threats (Hiriyappa, 2018). In the below section FCTG environment analysis for Australia
travel industry is done.
Political: Political elements include political stability, government policy, taxation policy
and trade restrictions (Joshi & Mittal, 2018). Australia is a politically stable country and there is
no such tensed situation in this country that trouble the travel industry. But due to changes in
travel and tour policies by the government this industry impacted negatively as there is a high
level of restrictions for tour operators and agents in Australia. As per Australian consumer law,
there are guidelines for online bookings, holiday deals and group buying, component pricing and
contracts and receipts (Peres, & Friel, 2019). Due to these high restrictions, it is quite difficult
for travel and tour operators to operate in Australia. Further, at present, the government
announced a travel ban in China, Iran, and South Korea. Hence, these types of decisions by the
government impact direct to FCTG and due to that, the company struggles to compete and
maintain its financial performance.
Economic: Economic elements that impact companies are the growth of the economy,
lifestyle, and price fluctuations. The determinants that might impact FCTG performance are the

Environmental Analysis
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growth of the travel industry across the world, price fluctuations, and exchange rates. In 2019,
the travel and tourism industry contributed $44.6 billion and this includes businesses of travel
agents, tour operators, and tourism in the country (Figure 1). This indicates that the travel
industry in Australia is struggling because of bush fire and various other incidents there is no
such tremendous growth in the market (Ulubaşoğlu, Rahman, Önder, Chen, & Rajabifard 2019).
As because of slow growth airlines are affecting, hotels are struggling (Dhiman & Kumar, 2019)
and thus FCTG performance also gets influenced.
Figure1: Growth of travel and tourism in Australia
Source: (Pham,2020).
Social: In recent years, the industry gets many opportunities because of social elements.
Some of the social elements that impact on the FCTG are related to characteristics of the target
market. The company target high and medium class people, business executives, corporates, and
people of age group 22-65 (FCTG,2020). Social elements from that benefit the company are
increasing the number of business tourist or an increasing number of people that visits Australia
and travel across the world for business purpose. As, in 2019 there were 8.5 million visitors and
from that 2.5 million travel for business purposes (Charles-Edwards, Bell, Panczak, & Corcoran,
2020). Due to that travel and tour industry focus shifted to targeting corporates. Further, the
buying pattern of buyers shifted as thy starting to use digital platform and want services such as
easy to buy forms in order to avoid inconvenience as in 2019, 68% people used online platform