Impact of Inflation on UK Tourism Industry

This research paper analyzes the impact of inflation on the UK tourism industry. It discusses the factors affecting inflation, aims and objectives of the research, and quantitative and qualitative measures. The paper also provides solutions to deal with the impact of inflation and an analysis of the Globus tourism company of the UK.

Research project

Table of Contents
INTRODUCTION...........................................................................................................................3
A) Meaning of Inflation..............................................................................................................3
B) Factors which affects the inflation in the country and the tourism industry..........................3
C) Aims and objectives of the research ......................................................................................3
MAIN BODY...................................................................................................................................4
Quantitative measures ................................................................................................................4
Qualitative measurement ............................................................................................................5
CONCLUSION ..............................................................................................................................6
A) Ascertain the solutions to deal with the impact of inflation..................................................6
B) Analysis of the Globus tourism company of the UK ...........................................................6
APPENDIX.....................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
A) Meaning of Inflation
According to International Monetary Fund inflation relates to increase in the price of
goods such as grocery items, clothing, transport and the food items. It will reduce the purchasing
power of the consumer and the customer will purchase less items on the same income as
previous year. It will increases the cost of every product and eventually slow down the economic
growth of the country. It has impact on the life style of the people and it becomes difficult for the
people to maintain its expenses (Le, and Nguyen, 2021). High inflation has increases the price of
hotel, restaurants and ticket price of tourist places that reduces the growth of tourism sector. In
this there is discussion of the UK tourism industry.
B) Factors which affects the inflation in the country and the tourism industry
 Interest rate: It is the rate where consumer borrow the loan for their needs. In the tourism
industry the rates of interest will be high in the UK country which discourages the people
to spend the more money on the tourism sector. It will increase the charges of air ticket
prices and reduces the travelling of tourist in to another country for visiting the places.
 Global events: The main purpose of organising the events at the global level is to attract
more tourist and to showcase the infrastructure of the company. It denotes the tourism
capacity of the industry and create a affirmative image of the destination. The events is
created at the domestic or global level and include the events like organise carnivals,
meetings and the cultural events on the rapid scale. It comprises the tasks that is related to
the exploring the new places, traditions and the experience of the individual(Murphy,
2019).
C) Aims and objectives of the research
Aim: The aim is to find out the affect of inflation on the travel sector.
Objective:
 To know the impact of the inflation in the UK country
 To understand the affect of inflation on the tourism industry
 To interpret the positive or negative consequence of inflation and provide the solutions to
cope up the situation.

 To see the qualitative and the quantitative measures and identify the tools and standards
to measure the inflation in the economy.
MAIN BODY
Quantitative measures
It is the measurement of the data that is counted in the facts and figures. The researchers
computed this information by computing the mathematical figures and the statistical data to take
relevant decisions and find out the deviations.
In the COVID pandemic there is highly recession is faced in the tourism industry. Then
there is again starting and important opportunities is analysed in the tourism sector. There is
outburst of the inflation on the tourism sector. There are many challenges that has to be
confronted by the tourism industry. According the statistical survey group the inflation has
increased by 6 % in the October and November 2021. It is the highest rate since 2008. It has
break the record and comes as the highest inflation rate in 20222. This denotes that inflation has
highly affected the hotels or the tourism industry (Li, and Singal, 2022). The acceleratory
inflation rate slow down the every segment of the businesses but these industries are severely
affected such as travel sector, food, cafes and restaurants or the hospitality area has left no
alternative to these enterprises to shut down the workings of the company. In addition to this the
outbreak of inflation has affect on the daily activities of the company and there is no exception in
the tourism industry.

Source: https://www.otainsight.com/resources/blog/inflation-hotel-rates-europe
From the given data it is evaluated that by differentiating the hotel prices of the UK
country from the year 2019 to 2022 in summer season there are several places of the Europe
country: Rome has 52%, Berlin 51% , London 45&, Amsterdam 12.1%, Paris 20 % and
Barcelona 29%. The evaluation of this information and the quantitative measurement from hotels
industry has major impact on the actions of the company. The data collected from the National
Statistics has appraised that the inflation rate has temporary affect on the business and the
inflation is on the peak point in the past or present years (Steiger, and Scott, 2020). It will
increases the cost of raw materials, price of labour and the higher food cost that adversely
impacted the business in critical way.
Qualitative measurement
It is the analysis which gains the information through attributes or features. It is not
measured through the facts and the figures. There are many qualitative tools is used to know the
positive or negative impact of inflation on the tourism industry.
Positive effect of inflation on the tourism industry
 It will help the UK tourism industry to earn more revenues. Higher class people has no
affect on rates of the increasing or decreasing rate of inflation. The higher status people
spend the more money on the tourist sector.

 It will generate more money in the Uk country and this funds can be used by the nation
for uplifting the standards of the people and to reduce the poverty. These money used by
the government for the infrastructure developments and for the social welfare.
 It helps to develop the goodwill of the country in terms of cultural heritage and to keep
the traditions or customs alive. It will create the employment to the local shops and local
food business.
 UK is the top most country where tourist people come to visit the places and it provides
more employment and improve the earnings of the person. It helps the tourist industry to
flourish more and helps in the economy also.
Negative effect of the Inflation on the tourism sector
 It will reduces the purchasing power of the people as tourist person has less money to
expend then they will resist to travel in UK country. The inflation of the UK country has
rising from the past years which has slow down the growth of tourism sector. Local
retailers of the person also raises the prices of the goods which is complicated problem
and slow the income of the local people.
 It reduces the chances of the middle class people to visit the tourist places because people
prefer to pay for the basic necessities rather than to plan for the trip.
 The bank will also increase the interest rate and it discourage the public to borrow more
money and there focus will be on the to save the money. The bank will fix the credit
quotas to give the loan for the fruitful activities (Tahir, 2020).
 It has impact on the every sector of the industry not one particular segment. The change
in rates will affect the hospitality sector, airline industry, hotels , cost of fuel,
employment sector and the tickets prices of the historical places.
CONCLUSION
A) Ascertain the solutions to deal with the impact of inflation
It is quite challenging task for the UK country to deal with the negative consequences of
the inflation. This is essential for the business to analysis and research the several ways to deal
with the situations. It is also must for the company to effectively handle the situation of the
inflation to meet the expectations of the customers by considering the cost variables to smoothly
carry out the operations of the financial sources. The reduction in the interest rate will encourage

the customers to spend more and they make plans for the travelling. It helps to boom the tourist
sector in the nation. Government can allow some allowances or concession to the individuals in
the restaurant or airline sector to induce them to see the countries. Tourist industry can offer
customize packages which propel them to think for travelling in to another country. By using
this tools and techniques country can deal with the rising rate of inflation. It becomes difficult for
every country to survive in the inflation (Abuselidze, and Mamaladze, 2020).
B) Analysis of the Globus tourism company of the UK
The Globus travel organisation of the Britain country has faces the several troubles with
the increasing rate of the inflation. The prime source of this company is to earn revenue from the
tourist which has reduced because of the impact of the inflation. Through this price of the every
item has increased that raises the uncertainty among the customers. The Globus travel company
of the UK has find the relevant choices to maintain the profitability of the company. This
company has given various rebates and discounts on the travel products to the customers to be
remain sustain for the long term in the future. Thus by doing this the company can get rid from
the unfavourable effect of the inflation.
APPENDIX

REFERENCES
Books and Journals
Le, T.H. and Nguyen, C.P., 2021. The impact of tourism on carbon dioxide emissions: insights
from 95<? A3B2 show $132#?> countries. Applied Economics, 53(2). pp.235-261.
Murphy, J.T., 2019. Global production network dis/articulations in Zanzibar: practices and
conjunctures of exclusionary development in the tourism industry. Journal of Economic
Geography, 19(4). pp.943-971.
Li, Y. and Singal, M., 2022. Corporate governance in the hospitality and tourism industry:
Theoretical foundations and future research. Journal of Hospitality & Tourism
Research, 46(7). pp.1347-1383.
Steiger, R. and Scott, D., 2020. Ski tourism in a warmer world: Increased adaptation and
regional economic impacts in Austria. Tourism Management, 77, p.104032.
Tahir, M., 2020. Terrorism and its determinants: Panel data evidence from 94 countries. Applied
Research in Quality of Life, 15(1). pp.1-16.
Abuselidze, G. and Mamaladze, L., 2020, July. The impact of the COVID-19 outbreak on the
socio-economic issues of the black sea region countries. In International Conference on
Computational Science and Its Applications (pp. 453-467). Springer, Cham.
Mandić, A., 2020. Structuring challenges of sustainable tourism development in protected
natural areas with driving force–pressure–state–impact–response (DPSIR)
framework. Environment Systems and Decisions, 40(4). pp.560-576.
Online:
Impact of inflation on tourism sector [online]. Available through
<https://www.emerald.com/insight/content/doi/10.1108/eb057715/full/html?
skipTracking=true >