Inflation and its Impact on Virgin Holidays: A Research Project

This research project explores the impact of inflation on Virgin Holidays, including causes and periods of inflation, negative and positive influences, and models and theories to reduce negative influence and increase positive influence.

Foundation Year Research Project
INTRODUCTION
Tourism basically comprises of all the different activities of an
individual staying in or travelling in places outside their usual
environment for not more than one consecutive year for different purposes
such as business, leisure and much more. The Tourism company chosen
for this report is Virgin Holidays. It is a company within the Virgin Group
that basically offers holidays worldwide with destinations such as Africa,
US, Canada, the Indian Oceana and much more. he present report
basically involves an overview of the organization and their services and
products. In addition to that it comprises of the causes of inflation and the
inflation time period that the organization has basically faced in the past.
Moreover, it involves research from reliable sources that helps in
identification of the models and theories which could be used in order to
deduct the negative influence of inflation and also increasing the positive
influence
Overview of the organization and their product and services
The organization Virgin Holidays Limited also known as the Virgin Atlantic
Holidays is a organization within the Virgin Group that basically offers holidays
worldwide with destinations such as Canada and US. The organization was founded in the
year 1985 with its headquarters in Crawley, England. Moreover, the company has
established themselves as a specialist and ski program cruise division called “Virgin
Holidays Cruises”. In its initial times, the enterprise was involved in selling seats on
Virgin Atlantic routes to Orlando, New York City and Miami. The company has grown to
becoming one of the successful and largest long-haul scheduled tour operators in the UK.
In 2020. due to the outbreak of COVID-19, the company announced that the enterprise
will be rebranded as Virgin Atlantic Holidays. The company is quite popular for offering
holidays globally with destinations comprising of Canada and US, the Far East, the
Caribbean, the Middle East, the Indian Ocean and Africa.
Cause and Period of inflation that the organization experienced in the past
The term Inflation basically refers to the increase in the rates of services,
products and prices within the economy. In a situation of inflation, the unit of currency
basically tends to but less services and products when prices are basically increased. In
reference to inflation, these include basically three types built in inflation, push inflation
and demand pull inflation. In case of the most common inflation indexes used involves
consumer price index and wholesale price index. In reference to Virgin Holidays, there are
various factors which resulted in inflation which comprises of increase in factors such as
cost of equipment and raw material, production cost, labour wages and much more. The
rise in demand of particular product basically leads to inflation. The circulation of money
such as cash, bank balance and coins have also faced a increase in economy which is
considered to be the main reason for the inflation. Another reason for inflation is basically

Evidence of the negative and positive influence of inflation
In context to inflation level, it basically decides the influence which could be measured as
per the particular criteria. The concept of inflation results in affecting the growth rate of the industry
which should be focused by the individuals. Due to the decline in the currency rate, it results in
affecting the consumers buying pattern. Different procedures and plans should be basically
developed keeping in mind the different situations through which the inflation rate can be controlled.
Positive Influence of inflation
Employment Opportunities: It plays a very important role in generating employment opportunities.
In case of organization, the number of individuals are needed for the objective to control the various
operations. It basically supports in maintaining the economy's positive level through offering various
job opportunities. It also reduces the employment from the society through improving the customer's
buying power.
Infrastructure development: Through inflation, it basically helps in developing the infrastructure in a
better manner through improving roads, air services and rails. Due to inflation, it basically helps the
tourism sector in building new facilities for the consumers.
In reference to Virgin Holidays, the company has faced negative influence which could result in
affecting the company's operations. Due to inflation, it could result in reducing the tourism industry
progress. There are various negative influence of inflation as mentioned below:
Disruption in supply chain: Due to inflation, it becomes difficult to maintain the supply chain in a
appropriate manner. Because of various elements, it basically results in supply chain discontinuation.
In context to Virgin Holidays, there are various models and theories
which can be used by the company for the purpose to reduce the
negative influence of inflation and increasing the positive influence:
In case of managers, it is very important for them to consider the
three strategic options which basically comprises of cleaning up the
product portfolios, replacing the pricing model and repositioning the
brand.
Recalibrate and Clean up the Portfolio: In reference to organisation,
there are different ways for the purpose to implement such kind of
alternative. If a particular service or product has different features,
the managers could consider adjusting and removing them through
creating opportunities for the new versions with few features at a low
price point.
Repositioning the brand: In case of organization, in order to deal with
the negative impact of inflation, the organization can solve the issues
through lowering the prices and reducing the marketing expenditures
for the aim to support a more realistic positioning.
Replacing the price model: In order to deal with the negative impact
of the company, the organizations can follow a “my-product-as-a-
service” model. Such kind of model is needed to respond to inflation
giving them a compelling reason to implement new plans. With the
help of replacing the pricing model, the organizations like Virgin
Holidays could deal or reduce the negative impact of inflation.
In case of Virgin Holidays, it is very important for the organization to
take necessary actions in order to deal with the issues and problems
faced by the company due to inflation. Due to negative impact of
inflation, it has resulted in lowering down the revenue generation
rate. In order to control the inflation, it is important to use
contractionary monetary policy. In case of tourism sector, it can

REFERENCES
Books and Journals
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Positive Role of the Tourism Industry for Dubai City in the United Arab
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CONCLUSION
From the above report, it can be concluded that the concept of inflation and its
negative and positive impact plays a very important role for the company. Also various facts
and figures has been identified with the support of research which could be utilised in order to
develop better understanding. The present report helps in brief discussion about the concept of
inflation in the economy. Also all the positive and negative impacts are basically evaluated in
order to identify the actual position of inflation. Also the rate of inflation and reasons of
inflation are basically studied in the present report with the support of proper evidences. Also
actual data and statistics can be gathered from the past recent years which helps in showing the
influence of inflation on tourism industry. Also it helps in detailed findings which helps in
offering right solution in order to overcome the negative influence of inflation.