Importance of London Tourism to its Business Environment and Roles of Key Stakeholders

This report discusses the importance of London tourism to its business environment and the roles of key stakeholders. It covers the economic dimension of tourism in London and its multiplier effects, as well as the motivation of London tourists. The report also explores the impact of globalization on London's tourism industry in the next five years.

London's Tourism
industry

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Importance of London tourism to its business environment and roles of key stakeholders............3
Economic dimension of tourism in London and its multiplier effects.............................................5
Motivation of London tourist ..........................................................................................................7
Impact of globalization on London in next five years.....................................................................8
CONCLUSION
.........................................................................................................................................................9

INTRODUCTION
Tourism and travel is one of the most growing industry in London that attract large number
of tourist to visit destination for having leisure and fun. It can be stated that tourism is wide sector
that includes accommodating, food and beverages, transportation and adventures which helps in
providing enjoyment to people or effective utilization of their leisure time and money. The present
study helps to understand about London Tourism industry who is growing at rapid stages due to
increase in number of tourist visit each year thus it had lead to economic growth and development.
This report will cover the information related to importance of London tourism to its business
environment, roles of stakeholders. Further study will also identify the impact of tourism on
economic growth of London such as generation of employment. The way globalization likely to
effect tourism industry of London in next 5 years and motivation factors that have inspired
individual to choose London.
MAIN BODY
Importance of London tourism to its business environment and roles of key stakeholders
More than 30 million tourist from different parts of country visit London each year in order
to have fun and enjoyment or spend their leisure time. It can be stated that it is famous city for
attracting large number of foreign tourist across worldwide. London's tourism is important for its
business environment that includes both internal and external factors such as customers, demand,
supply, management and employees for many reasons (Xiang and Fesenmaier, 2017). Such as it
helps in generating large amount of revenue and employment opportunities that helps in uplifting
living standard of people or increase in their income level. It is estimated that around 26 million of
overnight visits are made every years thus generated almost 10% of city gross added value income.
Therefore, there are various benefits of development and growth of tourism sectors in context of
business environment of London which can be stated as follows:
 Tourism is important sectors for people living in London as it have helped in generating
almost 13% of employment opportunities and overall contributed to GDP of country to
$16.2 billion. Thus, making life of people better by enhancing economic growth, average
disposable income or providing them employment to have better lifestyles.
 There are various attractive places in London such as Buckingham place, Victoria and
Albert museum and British museum are some places that helped in attracting large number
of foreign visitors each year. So there is vast business opportunities for enterprise that are
operating in tourism sectors to expand their business operation by investing money in

accommodation, adventures and food and beverages in order to meet customers expectancy
and needs (Erkuş‐Öztürk, 2018). Therefore, it can be stated that tourism sectors of London
have contributed in expansion of business by increasing their overall profitability.
 Around £15 million is invested in tourism sectors by London every years which state that it
have contributed in development of better transportation facilities, infrastructure. So that
more people can come to spend their vacation for far away places across worldwide. It has
made life of local residents more comfortable and easy as they have all necessary facilities
to live in London.
 At the same time increase in number of foreign visitors each year have contributed in
enhancing knowledge and awareness about the way environment and various resources
need to be saved and preserved so that it can be available for future and existing generation.
Thus, it means now- a- days most of the people in London have become aware of making
the best utilisation of resources thus it helped in availability of resources at affordable rates.
 London Tourism have also leads to increase in tax revenues and overall government
expenditure thus it helped in providing more ease and comfort to local communities to live
or to have attractive places to have fun, enjoyment and entertainment.
Roles of stakeholders
Stakeholder are individuals that are interested in Tourism industry of London such as people
that are employed in organizations which are operating in tourism sectors or suppliers, foreign
visitors investors, government and local residents. These are various people that are affected or
impacted by growth and success of London tourism sectors, so they play important role in
expansion of industry and generation of revenue (Sofronov, 2018). Therefore, several roles played
by each individuals in growth of tourism sectors of London is illustrated as follows:
 Government: Due to increase in number of foreign traveller every years, government have
make several efforts and steps to promote growth of tourism sectors in London so that more
people are attracted to visit destination for satisfaction of their needs. Government have
made better policies, flexible rules and regulations that encourages organisations in tourism
sector to provide the best accommodation, food and beverages or better facilities to foreign
visitors.
 Local residents: They have also helped in growth of tourism sectors by making city more
clean and hygiene so that foreign tourist have attractive place and good infrastructure to
stay and have fun. Stakeholder also share their social culture, tradition, belief and values
with foreign tourist thus helps in providing better services or creating awareness of London

culture and tradition to visitors that came form different parts of country.
 Organisations: There are numerous organisations that are operating its function in tourism
sectors in order to earn more profit and increase market share by delivering qualitative
services to customers. Management of firms are putting their time, money and efforts to
provide services that are beyond expectancy of customers so that they are motivated to be
part of specific firm as compared to others. They provide various services such as Spa
facilities, Free Wi-Fi, online booking and payment options so that customers can easily
books rooms without standing in queue (Shabanova and et.al., 2016). Therefore, enterprises
related to tourism and hospitality sectors helped in fulfilment of tourist needs in the best
possible manner for future growth.
 Investors: They are other key stakeholder who plays important role in tourism and
hospitality by investing their excel capital or fund in various segments so that they provide
better services and facilities of stay. Such as most of the investors in London have invested
their capital in food and beverages, accommodation and travel facilities so that people can
live, move to attractive places to have enjoyment (Mathouraparsad and Maurin, 2017).
Therefore, investors in order to earn better return on capital invested has contributed in
expansion of tourism industry and delivering best services to people.
So, it can be stated that all these were some of the key roles which have been played by
different stakeholders so that London can become most attractive place for number of tourist .
Economic dimension of tourism in London and its multiplier effects
Economic dimension is a term that includes key elements such as economic systems,
condition and policies that are prevailing in particular country. Various dimension of London
tourism are existing interest rates, overall GDP of country, unemployment rates, government
expenditures and disposable income of customers or taxes (Naydenov and Traykov, 2017). It also
have multiplier effects such as employment generation, increase in disposable income and more
availabilities of facilities and infrastructure. Therefore, economic dimension of tourism sectors of
London are discussed as follows:
Gross domestic product or gross national income: It has been found that Tourism industry of
London contributed its biggest part in the growth of economy. Such that 9% across United
Kingdom and 11.6% of capital GDP which clearly reflected that huge amount of revenue have been
earned by tourism and travel segment. The market of tourism is growing at rapid stages as it is
expected that the amount will further rise in future circumstances. Multiplier effects of Gross
national incomes (GNI) is that change or increase in GNI has lead to upliftment in living standard

of people and increase their overall purchasing power.
Unemployment Rates: It is another dimension of economic of tourism as it states about number of
people are employed in London in tourism and hospitality sectors. Tourism have contributed in
reducing unemployment rates in London because the industry provide employment opportunities to
large number of people. Out of 7 almost 1 individual is employed in tourism sectors, it has
supported around 3.79 million jobs in London hence it contributed in growth and development of
economy. Its multiplier effects is that people have more income, better lifestyles due to availability
of various alternative opportunities for part, full time job (Duro and Turrión-Prats, 2019). Such as
tourism sectors within London have employed 90% individuals on permanent basis and 5% on
casual basis.
Income distribution: It is another economic dimension that determine the way income is
distributed in the particular sectors so that all individuals have sufficient income to live better
lifestyles. London tourism sectors is facing situation of unequal distribution of income that have
lead to gap between rich and poor. Due to this, only 10% of household are enjoying 60 per cent of
total wealth thus they have more better live as compared to other individuals that live in society. So,
it have caused inequality, discrimination and segregation of society into various segments indirectly
impacted economy. That is why, efforts need to be made to promote equal distribution of income in
tourism and travel sectors so that it can further grow and expand in future.
Inflation: The rate of inflation has decreased from 1.79% in 2019 to 1.19% in 2020 thus people
does not have to pay high prices in order to purchase specific products and services in order to fulfil
their respective requirements. Due to decrease in inflation rates over some years, tourism sectors is
able to provide better or qualitative services at reasonable prices thus able to meet customers
expectancy (Sofronov, 2019). At it can purchase products or services at lower prices hence able to
delivered maximum values to end users. Thus, the multiplier effects of inflation is that it lead to
increase in number of foreign visit in particular years, more services at minimum prices thus people
can access better accommodation and other services by paying less amount. So overall this
dimension have contributed in growth and development of tourism sectors of London in United
kingdom.
Private consumption: It is dimension of economic which is used to measure total amount of
money spend by number of individuals in order to purchase specific goods and services to fulfil
their needs. It has been estimated that overall millions of people visit London every year to enjoy
their holiday, leisure time and money thus, approx £15 million have been spent by them. Due to
various attractive places in London visitors are ready to invest their money to have fun at London.
Thus, it has contributed in increasing GDP or GNI, generation of more employment and enhancing

profitability of company thus promoting more investors to invest their capital in particular sector to
earn more return (Hong, 2018).
Unit labour cost: It states amount of money or wages that are paid by enterprise to its employees or
workers that are providing several services to guest. It has been found that unit labour cost have
been increased in London by 27.4 % in second quarter of 2020 which means more wages are paid to
employees who are working in tourism sectors of United kingdom. Thus, it can be stated that
increased in United labour cost have contributed in rising cost of organizations to delivered services
to customers (Liang and Latip, 2018). At the same time it has attracted more individuals to be part
of tourism sector in order to earn or enjoy more income.
Interest rates: The current interest rates is 0.1 thus due to low interest rates investors and
entrepreneur are ready to invest their capital in tourism sector to earn more profit. Therefore,
decrease in interest rates have contributed in more investment or expansion of enterprise that are
operating their function in tourism sectors.
Motivation of London tourist
London is an world-famous destination as it have various unique features like tasty and
delicious food, better infrastructure and facilities that have motivated people to select it despite
other places. So, there are many reasons that have contributed in motivating foreign visitors or
increase demand, growth of tourism sectors that are discussed below as:
Attractive places: London is a destination that is visited by large number of individuals around
years to spend their leisure time as it have number of attractive places such as Buckingham places
that motivated 15 million tourist to visit London. It is place where world-famous events are held
such as “ changing of guard” and it is inspired by song “ Bob Dylan”. There are several other places
like St James park and Green park and museum named Victoria and Albert that is the biggest
museum in world (10 Reasons To Visit London, 2019). At the same time most of the cities of
London are located near banks of river Thames that have motivated people to choose London as
compared to other destinations.
London theater: It can be stated that there are world best theater in London that have talented
actors thus it is not surprised for individuals to see famous faces on the stage. Thus, tourist come
form different destination and places to enjoy shows of famous actors organized in theater of
London.
Accommodation: There are several hotels, restaurants that are suitable for all individuals that
belong to different taste and budgets. London has plenty of cheaper options or qualitative services
available at lower prices thus people around world are motivated to select London to have fun.

Food and drink: London is rich in providing varieties of food and beverages such as it have
restaurants ranging form Michelin- Starred to traditional British restaurants. There are various types
of bar such as riverside, rooftop and Champagne that helps in providing extreme qualitative services
to individuals.
Shopping: People that like to purchase products and services from different parts of country are
motivated to visit London as it have several departmental stores that offer varieties of products and
services at reasonable rates (Top 10 reasons to visit London, 2019). It has products or services
related to taste of local and traditional market that helps in satisfying needs of individuals thus
motivating them to choose London.
Evolution of growth and demand factors in tourism sectors of London
In initial stages, there were limited facilities, political restriction but as soon all these were
amended or infrastructure were built and government takes steps to encourage more foreign visitors.
Tourism and travel sectors started growing at rapid stages thus more firms expand their business to
earn more profitability. It can be stated that London tourism has grown or there is increased in
demand of London destination over years due to several reasons such as now – a days people have
become more demanding due to availability of several alternative options (Vargas-Sánchez, 2019).
Increase in overall disposable income of customers has also leads to growth or more demand of
tourism sectors as people are ready to spent their money in having fun at different place. London is
one of the attractive places so it has contributed in attracting large number of people form different
places or growth of tourism sector.
Impact of globalization on London in next five years
Globalization has contributed in better interconnection between countries thus exchange of
social, economic culture and traditions or flow of people, investment and information. It can be said
that globalisation will lead to increase in mobility of people from one place to another and make
travel easier. Digitalization and innovation in technology have contributed in better connection of
countries, share of each other culture and beliefs thus in next five years. It has projected that by
2025, 40.5 million national and international visitors will be attracted and motivated to visit London
so that it can enjoy economic benefits (Kim and Jeong, 2018). Globalization have lead to increase in
competition level thus London in order to retain its tourist visitors have to provide more
personalized services to customers. People can easily books hotels and restaurants due to
availabilities of innovative technologies and internet connection. In near future, people will have
more options to select products or services of specific organisations as there are number of firm
delivering unique services to customers. Therefore, there are several positive outcomes of

globalization such as increase in number of foreign visitors, income or GDP of country and
economic growth.
Drivers that contributed in growth of tourism sectors are digital technologies, reframe of
rules and regulations of government, availabilities of economic resources. Such as large number of
people are using social media or search engine in order to cater information related to particular
places, and services offered by it (NAZLI, 2016). UK's government have also promoted free trade
policies that encourages more foreign visitors to come to London to spend their holidays. There are
limited resources in environment so due to globalization countries are able to share each other
resources and fulfil their respective requirements.
CONCLUSION
From the above report it can be concluded that Hospitality and tourism is one of the biggest
sectors that have helped in generation of employment opportunities and increased in disposable
income of people. The above study shows that there are numerous economic dimension that have
multiplier effects such as availability of infrastructure, resources, job for number of people. At last it
can be concluded from above report that globalization has lead to better coordination of countries
and exchanges of each other culture thus promoted London tourism.

REFERENCES
Books and journals
Duro, J. A. and Turrión-Prats, J., 2019. Tourism seasonality worldwide. Tourism Management
Perspectives, 31. pp.38-53.
Erkuş‐Öztürk, H., 2018. Related variety and innovation: evidence from the tourism
industry. Tijdschrift voor economische en sociale geografie, 109(2). pp.256-273.
Hong, J., 2018. Rise of the sharing economy and the future of travel and tourism industry. Journal
of Hotel & Business Management, 7(2). pp.5-11.
Kim, H. J. and Jeong, M., 2018. Research on hospitality and tourism education: Now and
future. Tourism Management Perspectives, 25. pp.119-122.
Liang, H. C. K. and Latip, H. A., 2018. Factors affecting attendees’ decision-making in convention
tourism industry. Advanced Science Letters, 24(6). pp.4414-4420.
Mathouraparsad, S. and Maurin, A., 2017. Measuring the multiplier effects of tourism industry to
the economy. Advances in Management and Applied Economics, 7(2). p.123.
Naydenov, K. and Traykov, T., 2017. CITIES CENTERS FOR TOURISM
DEVELOPMENT. Knowledge International Journal, 16(4). pp.1765-1768.
NAZLI, M., 2016. Does Sustainability Matter? A Qualitative Study in Tourism Industry. Journal of
Yasar University, 11(44).
Shabanova, L and et.al., 2016. The technology of creation of the standard base for socio-economic
dimensions.
Sofronov, B., 2018. The Development of the Travel and Tourism Industry in the World. Annals of
Spiru Haret University. Economic Series, 18(4). pp.123-137.
Sofronov, B., 2019. The Development of Marketing in Tourism Industry. Annals of Spiru Haret
University. Economic Series, 19(1). pp.117-127.
Vargas-Sánchez, A., 2019. The new face of the tourism industry under a circular economy. Journal
of Tourism Futures.
Xiang, Z. and Fesenmaier, D .R., 2017. Big data analytics, tourism design and smart tourism.
In Analytics in smart tourism design (pp. 299-307). Springer, Cham.
Online

10 Reasons To Visit London, 2019, [Online]. Available Through:
<https://www.guidelondon.org.uk/blog/major-london-sites/10-reasons-to-visit-london/>.
Top 10 reasons to visit London, 2019, [Online]. Available
Through:<https://www.visitlondon.com/things-to-do/visiting-london-for-the-first-time/ten-
reasons-to-visit-london>.