Impact of Inflation on Hays Travel Limited: A Case Study

This case study analyzes the impact of inflation on Hays Travel Limited, a UK-based travel agent. It discusses the company background, key operations, and markets, as well as the inflationary periods and main causes affecting the company. The presentation also covers inflation management theories deployed by the company and concludes with effective strategies to deal with inflation.

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Introduction
Inflation has become a severe problem for the
companies in current period of time as it has direct
impact on the function ability and operations of the
business entity. In this regard, it is imperative to assess
the impact of inflation regularly so that the
organizations can structure suitable strategies in order
to deal with negative impacts of inflation. Now, the
rates of hotel services have been enhanced which
significantly affects the spending decisions of
customers (Naidu, Chand and Pandaram, 2017).
Key operations and markets Conclusion
Through the above-mentioned
information, it is analyzed that
inflation is likely to affect the
operations of the business
organizations significantly.
This might create a profound
impact on the overall sales and
revenue of the entity..
Inflation management theories
deployed
Control of money policy: There is
close association between supply of
money and inflation.
Supply-Side policies: This policy is
important in terms of increasing
competitiveness and efficiency of the
entire economy that creates direct
pressure on long-term costs.
•Fiscal Policies: This is also considered
as an imperative method with an aim to
deal with inflation present within the
economy. Here, high rate of income tax
can reduce spending, demand and also
inflationary pressure (Van Hoa, Turner
and Vu, 2018).
•Wages/prices control: As per one of
the significant theories, controlling
wages and prices is also useful to
minimize the overall inflationary
pressure. However, these type of
methods are used rarely as they are less
effective.
Company background and overview
Hays Travel Limited is an independent chain of travel agent having
headquartered in England. The company used to own large number
of retail travel shops across UK. Being an independent travel
agent, they uses other tour operators like Jet 2 and TUI in order to
provide necessary tour packages for holidays to customers in UK.
The respective entity was founded in the year of 1980 by John
Hays by initially opening a small retail store.
Hays travel is one of the well-known tour operator based on UK. It
offers holiday packages to customers across different locations
including Turkey, Greece, Malta, Portugal, USA and more. The
major products offer by the respective entity are cruise holidays,
hotels, resorts and so on. In 2019 , Hays Travel bought 555 high
street travel agents from Thomas Cook which was a collapse tour
operator. At that time, the acquisition was seemed really well that
will help Hays in ensuring growth in upcoming years. The deal
was of Euro 7.8 million that tripled the size of Hays retail estate
by adding 2,300 staff.
References
•Naidu, S., Chand, A. and Pandaram, A., 2017. Exploring the nexus between urbanisation, inflation
and tourism output: empirical evidences from the Fiji Islands. Asia Pacific journal of tourism
research, 22(10), pp.1021-1037.
•Ghosh, S., 2019. Uncertainty, economic growth its impact on tourism, some country
experiences. Asia Pacific Journal of Tourism Research, 24(1), pp.83-107.
•Cannonier, C. and Burke, M.G., 2017. Tourism and financial development in small states:
Evidence from Caribbean countries. Tourism Economics, 23(6), pp.1369-1377.
•Van Hoa, T., Turner, L. and Vu, J., 2018. Economic impact of Chinese tourism on Australia: A new
approach. Tourism Economics, 24(6), pp.677-689.
•Online
•
•Gross sales of Hays Travel Limited in the United Kingdom (UK) from 2008 to 2021. [Online].
Available through :<
https://www.statista.com/statistics/956010/hays-travel-ltd-gross-value-of-sales//>
•ABOUT HAYS TRAVEL. [Online]. Available through :< https://www.haystravel.co.uk/about/>
Inflation has become a severe problem for the companies in current
period of time as it has direct impact on the function ability and
operations of the business entity. In this regard, it is imperative to
assess the impact of inflation regularly so that the organizations can
structure suitable strategies in order to deal with negative impacts
of inflation. There are numerous caused of inflation including cost-
plus inflation, increased money supply, policies and regulations and
more (Ghosh, 2019).
The company experienced high inflation during COVID-19
pandemic where there were lack of resources, raw material and
availability of other needed resources. Therefore the price of their
services also got enhanced. The main work of the entity is to
arrange holiday packages for the customers. Due to the pandemic,
there is imbalance between demand and supply of services that put
a direct impact on price of services. Post pandemic, the price of tour
packages has been increased as demand is high.
Inflationary periods and main
causes and its impact on company

Company Background and
Overview
Hays Travel Limited is an independent chain of travel agent having headquartered in England. The company used
to own large number of retail travel shops across UK. Being an independent travel agent, they uses other tour
operators like Jet 2 and TUI in order to provide necessary tour packages for holidays to customers in UK. The
respective entity was founded in the year of 1980 by John Hays by initially opening a small retail store. Further,
they keep on expansion and resulted become one of successful travel agent of holding largest number of retail
travel shops within the nation. Being the largest independent travel agent, they are specialized in terms of
providing good value, quality holidays to customers along with excellent customer services. In addition to this,
the respective organization offers tour packages to customers to different destinations. Along with this, they also
provide services of cruise holidays. The locations covered by them are Spain, Turkey, Greece, Malta, USA and so
on. However, the entity is significantly affected with inflation in terms of impact on their overall sales & revenue
practices.

Key Operations and Market
Hays travel is one of the well-known tour operator based on UK. It offers holiday packages to
customers across different locations including Turkey, Greece, Malta, Portugal, USA and more. The
major products offer by the respective entity are cruise holidays, hotels, resorts and so on. The main
aim of the respective organization is to provide the best possible holiday experience to its customers.
In 1990, first Hays call center opened and in 1995 Hays Travel Independent group was constructed. In
1997, they diversify in home working and in 2013 they completed the acquisition of Bath Travel
(ABOUT HAYS TRAVEL, 2022). In 2019 , Hays Travel bought 555 high street travel agents from
Thomas Cook which was a collapse tour operator. At that time, the acquisition was seemed really well
that will help Hays in ensuring growth in upcoming years. The deal was of Euro 7.8 million that
tripled the size of Hays retail estate by adding 2,300 staff. year (Gross sales of Hays Travel Limited in
the United Kingdom (UK) from 2008 to 2021).

Inflationary period and main
causes
Inflation is about increasing in the price of a product during a certain period of time. Inflation is a broad term
that increases overall prices along with cost of living within the country. During inflation, rates of products and
services get high which create burden on receiver and provider both. It also affects the overall revenue and
profitability of the organization. The main causes of Inflation are increase money supply, devaluation, policy
regulations, rising wages and more. When supply of money increased in the market in terms of cash, coins and
more, it further creates inflation in market place. Additionally, devaluation makes the country’s exports less
expensive and encourage foreign nations to buy more and more devalues goods. Due to this, foreign products
for devaluing country becomes expensive that stimulates citizens of devaluing nation to buy domestic products
over foreign imports. Sometimes, policies and regulations also caused increase in the overall price that further
creates inflation in market. In case of Virgin Holidays, they are also facing issues related to inflation that might
affect future operations of the entity profoundly.

Identify period and causes of inflation that company
experienced in the past
Inflation has become a severe problem for the companies in current period of time as it has direct
impact on the function ability and operations of the business entity. In this regard, it is imperative to
assess the impact of inflation regularly so that the organizations can structure suitable strategies in
order to deal with negative impacts of inflation. There are numerous caused of inflation including cost-
plus inflation, increased money supply, policies and regulations and more (Ghosh, 2019). The
company experienced high inflation during COVID-19 pandemic where there were lack of resources,
raw material and availability of other needed resources. Therefore the price of their services also got
enhanced. The main work of the entity is to arrange holiday packages for the customers. Due to the
pandemic, there is imbalance between demand and supply of services that put a direct impact on price
of services. Post pandemic, the price of tour packages has been increased as demand is high.

Inflation management theories deployed
In the present era, inflation has become a major issue for the business entities as it has direct impact on
their function ability and operations. In case of tourism industry, they are significantly affected due to
inflation as it leads the overall price of their products at higher rate which cannot be easily afford by
all the customers. In terms of controlling negative impacts of inflation, the major theories are
mentioned below: Control of money policy: There is close association between supply of money and
inflation. Hence, controlling the money is imperative to control inflation within the nation (Cannonier
and Burke, 2017). Fiscal Policies: This is also considered as an imperative method with an aim to deal
with inflation present within the economy. Here, high rate of income tax can reduce spending, demand
and also inflationary pressure (Van Hoa, Turner and Vu, 2018).

Conclusion
From the above-mentioned information, it can be summarized that inflation is also caused by land
values as tourism generates additional demand for land. Further the increase in price is compensated
by customers by increasing the charges significantly. High amount of inflation put a significant
impact on demand of tourism and also affect tourism sector in developing industry. In addition to
this, international tourism is likely to facilitate internal and external changes within the industry. The
above report is based on Virgin Holidays which is a well-known company for preparing effective
Holiday packages for passengers. It is found that the entity is facing great inflation that will create
issues in terms of managing pre-defined level of revenue & profit. There so discussion regarding
certain effective strategies that can be used by the company to deal with inflation significantly.