Impacts of Inflation on Tourism Industry and Solutions

This article discusses the definition of inflation, events leading to inflation, and the positive and negative impacts of inflation on the tourism industry. It also provides solutions to ease the negative impacts of inflation and examples of tourism companies. The subject is economics and the course code is not mentioned. The content is relevant to anyone interested in the tourism industry and its relationship with inflation.

What are the Typical Impacts
that Inflation can have on the
Tourism Industry and What
Solutions to Ease the Negative
Impacts can be Implemented

Table of Contents
1) INTRODUCTION.......................................................................................................................3
a) Definition of Inflation..............................................................................................................3
b) List of events leading to Inflation............................................................................................3
c) Aims and Objectives................................................................................................................3
2) MAIN BODY..............................................................................................................................4
3) Explanation of the types of data..............................................................................................4
4) Positive and Negative impacts of inflation on tourism industry.............................................5
5) CONCLUSION...........................................................................................................................6
a) Solutions proven to ease the negative impact that inflation has on tourism industry.............6
b) Tourism company examples for making research to be effective...........................................7
REFERENCES................................................................................................................................1
6) APPENDIX.................................................................................................................................2
Timescale.....................................................................................................................................2

1) INTRODUCTION
a) Definition of Inflation
Inflation is defined as the increase in the price of goods and services in the economy. It is
the sustained price which rises. This means that on average the price of goods and services are
going and rising higher with time (Candia, Coibion and Gorodnichenko, 2021). As soon as the
price level rises each pound or dollar buys fewer products and services which are denoted and
are there in the market at large scale to be made available to the customers. This means the real
value or the purchasing power of the money falls. The inflation also helps in rising the levels of
the economy and this helps in creating the perspectives which are related to addressing the
concerns helping to initiate growth and development in the economy.
Inflation is considered as an important key aspect which helps in growing the economy and
this also measures the key concerns impacting the tourism industry. This is understandable with
the help of some key details and information gathered on the tourism industry at large scale.
b) List of events leading to Inflation
There are some key events which leads to inflation are –
 Excess of money supply.
 Demand – supply imbalance.
 Increasing service cost/ production cost (Bernanke and et.al., 2022).
These are the key events which lead to inflation as they are the major key concerns related to
how the measure in the economy is analysed. The services and production in the economy are
the key considerations which leads to analysing the key aspects leading to evaluating the
perspectives which helps in analysing these events taken into measure at large scale. This is the
measure which is related to identifying the perspectives of inflation. The global events are also
the major cause of inflation which enables the high rise in the services provided to the
consumers.
c) Aims and Objectives
Aim – To analyse the impact of inflation on tourism industry.
Objectives –
 To understand the concept of inflation.

 To analyse the impact of inflation on tourism industry.
 To identify the positive and negative impacts of inflation on tourism industry.
 To recommend solutions to ease the negative impact of inflation on tourism.
2) MAIN BODY
3) Explanation of the types of data
There are two types of data which are defined as –
Qualitative Data – It is the type of data which deals with description. It cannot be measured but
observed. There are also some minor examples which include – appearance, textures, data etc.
The basis of this data is that it represents quality (Miles, Huberman and Saldaña, 2018).
Quantitative Data – It is the type of data which deals with numbers and can be measured. Some
of the minor examples are – time, sound levels, members, length etc. The basis of the
quantitative data is that it represents quantity.
There is larger impact of inflation on SME’s and businesses as there is larger impact on the
prices and this is mentioned with the details and information provided regarding the higher
production cost to the customers in the form of higher prices at large scale within the business
and SME’s (Lea, 2021). Inflation was increased during the years 2016 and 2017 as soon as the
prices of import went up. This was the major consequence which was noticed during the fall in
the value of pound in late 2015. This was under the circumstance which was noticed earlier and
under the result of EU referendum in June 2016. The inflation rate has been depicted and made
understandable as per the quantitative data is denoted as 8.6%.

The graph represents the inflation rate trend in UK. The total inflation rate of UK is denoted as
9.9%. The Consumer Price Index has been denoted as per the data which has been made
available including the housing costs which rose by 8.6% in 12 months of August 2022 down
from July which was identified as 8.8% in July (Omar and Fraser, 2020). Rise in the food prices
made partially offsetting contribution which is upward to the change in the rates. This is also
depicted in the perception of changes which are made for the tourism industry which is impacted
by inflation. In relation to the tourism industry, non-alcoholic and beverage price rose by 13.1%
in the 12 months to August 2022 up from 12.7% in July. The current rate is highest since August
2008.
This is how effectively and in significant manner the quantitative data is mentioned and is
characterized at large scale. This is the basis as per how effectively and in significant manner the
inflation rate for food and non – alcoholic beverages continue to rise. This is the basis as per how
the inflation rates have been decreasing at large scale (Oluwafemi, Mitchelmore and
Nikolopoulos, 2020). This is considered as per how the inflation rates have been identified and
data is made available to the concerns. This is represented as statistical data which helps in
understanding that the impact of inflation is great on tourism industry.
4) Positive and Negative impacts of inflation on tourism industry
Positive impacts of inflation on tourism industry – There are some very important points and
key details which have been gathered regarding the positive impacts of inflation which has on
the tourism industry and these are identified as –
 High inflation is significant in the developing countries.
 There is high susceptibility in the international tourism which helps in denoting that there
are some major internal changes (example – prices) and external changes such as
(example – global economic trends) to the tourism industry.
 There are higher profits as the products and services can be sold at higher prices during
inflation (Athari and et.al., 2021).
 There is also increase in the production for the products delivered to the customers in
tourism industry.
 For example – improvements in the infrastructure helps in ensuring the concerns related
to how effectively the tourism industry is positively impacted at large scale.

Negative impacts of inflation on tourism industry –
 There are fluctuations which are observed in the exchange rate.
 There is also higher impact on the cost of borrowing which impacts the tourism industry.
 Increase in the cost of living is the negative factor which is identified in the tourism
industry.
 The money which is made in the tourism industry loses its value due to inflation (Scarlett,
2021).
 Internal and external factors are changed which helps in understanding the perspectives
related to the inflation in the tourism industry.
 For example – High inflation impacts the products and goods in the tourism industry.
These are some of the significant key negative and positive impacts which have been identified
in the tourism industry. With the help of these detail and information, it is analysed that the
measures which are idealized within the concerns related to addressing the key points within the
tourism industry at large scale (Nguyen, Binh and Su, 2020). It is also determined that the
perspective of creating value towards inflation key positive and negative points are addressed
within this description of evaluating the key points related within the impacts of inflation in
significant manner. Therefore, the manner in which the aspects and perspectives of identifying
the key concern related to mentioning the positive and negative points are addressed.
5) CONCLUSION
a) Solutions proven to ease the negative impact that inflation has on tourism industry
There are some solutions which are provided and are proven to ease the negative impact of
inflation which has on tourism industry. These solutions are –
 Increase in the traditional employment should be done, increased and favoured into.
 There should be independency of the tourism factors which are major perspectives related
to initiating the analysis based on the tourism industry to be initiated on the positive
levels at large scale (Khalid, Okafor and Shafiullah, 2020).
 Usage of transportation facilities should be initiated at lower costs so that there are
different perspectives which are related to addressing the major key concerns at large
scale.

 Supporting of local businesses and people should be the major points of concern within
the tourism industry so that the tourism industry is aware of the major points which are
helping to initiate the positive aspects at large scale.
Therefore, these are some major points which are included in the solution for how the negative
aspects can be removed at large scale. This is how effectively the points are taken into
consideration for how long the difference in the negative and positive impacts can be managed.
b) Tourism company examples for making research to be effective
Tourism is defined as the social, economic and cultural phenomenon which helps in
entailing the movement of people to the environment for personal and professional business
purposes. This helps in establishing the perspectives related to effectively achieving the targets
and the concerns regarding to understand the concerns related to promoting the business of
tourism at large scale (Nayyar and et.al., 2018).
There are some major examples which have been established and are identified in the
perspective of tourism industry and these are and these are the companies which are operating in
UK. These are mentioned as –
 There are certain sustainability practices which are catered in the Premier Inn which
impacts the data of the company and business in positive manner.
 To enhance the performance of the company Premier Inn supports the concerns related to
addressing the major points of concern at large scale in significant manner.

REFERENCES
Books and Journals
Athari, S.A. and et.al., 2021. The (Un) sticky role of exchange and inflation rate in tourism
development: insight from the low and high political risk
destinations. Current Issues in Tourism. 24(12). pp.1670-1685.
Bernanke, B. and et.al., 2022. 21st Century Monetary Policy: The Federal Reserve from the
Great Inflation to COVID-19.
Candia, B., Coibion, O. and Gorodnichenko, Y., 2021. The Inflation Expectations of US Firms:
Evidence from a new survey (No. w28836). National Bureau of Economic
Research.
Khalid, U., Okafor, L.E. and Shafiullah, M., 2020. The effects of economic and financial crises
on international tourist flows: A cross-country analysis. Journal of Travel
Research. 59(2). pp.315-334.
Lea, R., 2021. CPI inflation picks up further in June, increasing concerns over rising inflationary
pressures. Arbuthnot Banking Group, 19.
Miles, M.B., Huberman, A.M. and Saldaña, J., 2018. Qualitative data analysis: A methods
sourcebook. Sage publications.
Nayyar, A. and et.al., 2018. Virtual Reality (VR) & Augmented Reality (AR) technologies for
tourism and hospitality industry. International journal of engineering &
technology. 7(2.21). pp.156-160.
Nguyen, C.P., Binh, P.T. and Su, T.D., 2020. Capital investment in tourism: a global
investigation. Tourism Planning & Development. pp.1-27.
Oluwafemi, T.B., Mitchelmore, S. and Nikolopoulos, K., 2020. Leading innovation: Empirical
evidence for ambidextrous leadership from UK high-tech SMEs. Journal
of Business Research. 119. pp.195-208.
Omar, O. and Fraser, P., 2020. Small and medium-sized enterprise retailing in the UK.
In Entrepreneurship Marketing (pp. 202-221). Routledge.
Scarlett, H.G., 2021. Tourism recovery and the economic impact: A panel assessment. Research
in Globalization. 3. p.100044.
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6) APPENDIX
Timescale
Activities Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
Definition of
Inflation
List of
Events
Aims and
Objectives
Types of
data
Positive and
negative
Impact of
Inflation on
Tourism
Industry
Solutions for
Issues
Tourism
Company
Examples
2