Macro-level Issues in the Travel and Leisure Sector

This report discusses the macro-level issues in the travel and leisure sector and their potential impacts at the micro level. It also provides suggestions for overcoming challenges in conducting the tasks.

Running Head: MANAGEMENT 0
Business Environment
Student details

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Contents
Introduction....................................................................................................................2
Travel and Leisure Sector..............................................................................................2
Task a: Macro-level Issues.........................................................................................3
Task b: Impacts at Micro Level.................................................................................6
Task c: Challenges & Suggestion..............................................................................7
Conclusion......................................................................................................................8
Bibliography...................................................................................................................9

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Introduction
From airlines, cruise lines, tour companies, theme parks, and hotel to the restaurant, all the
services and products fall under the categories of travel and leisure’s sector. There are some
necessities of travel and leisure sector such as dining, entertainment, lodging and
transportation and the combinations of these necessities offered to the tourist. Tourist chooses
these combinations for his trips and holidays (Santos, 2004, pp.393-410). In addition, the
travel agencies might do the planning of trips and holidays for tourist, depends on their
requirements. In the recent scenario, people have written guides of major destination
available on internets, they gather all the travel, and leisure information such as hotel
bookings, making plans and accommodation booking from the internet (Vasudavan, 2000,
pp.45-54).
The ‘Travel & Leisure Industry’ is been one of the world’s largest industry, which is
increasing rapidly worldwide. Moreover, the purpose of this industry is to provide leisure
travels to the tourist (Richard & Zhang, 2012, pp.568-93).
In this report, there is a discussion on the macro level issues of travel and leisure sector and
its potential impact at the micro level on both the sectors. In addition, the discussion also
contains the challenges and suggestion for these issues.
Travel and Leisure Sector
The word leisure means free time in which people wants to enjoy. The Leisure Industry is
refers to is that part of the industry, which focused on recreation, tourism, sports and
entertainment related services and products (Swarbrooke & Horner, 2012). Whereas, Travel
Industry refers to that part of the industry, which focused on railways, cruise lines, package
tours, car rentals, hotels and travel insurance-related services and products. Both the

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industries are interrelated as the supply chain of these sectors involve many services apart
from transport and accommodations such as restaurant, entertainment shows, clubs,
waterparks and sports activities which are preferred by tourist in their vacation planes
(Brotherton & Wood, 2008, p.90).
Task a: Macro-level Issues
The ‘Travel & Leisure Industry' has many significant issues at the macro and micro level in
the dynamic business environment. These issues are discussed with the help of ‘PESTEL
Analysis' in the below paragraphs. In considering the factors, which are included in the
analysis provides the macro level issues for the industry in the business environment. These
factors explained in the following points:-
a. Political Factors
In Travel & Leisure sector, it is very important to consider the political condition and stability
of the country (Morello, 2019). It is done to determine the actual picture of the destinations,
which attracts the customer attention towards it. On the other hands, if the place involves the
activities such as warfare, terrorism, violence and coups. These activities give negative
impacts on the development of travel and leisure industry. Strikes, travelling norms, change
in the rules and regulations of the government are the other factors, which can also harm the
image of the destinations.
This factor is a macro level issue for the travel and leisure sector as if there is political
instability in the country, it can create negative publicity of the destination and causes
decrease in arrival of tourist. In addition, if the country has the good political conditions, it
will increase the overall profitability of the business.
b. Economic Factors

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Economically ‘Travel & Leisure Sectors’ is counted as one of the best industries all over the
world. The employees in this sector have higher pay scale as compare to the other sector’s
employees (Kahle, 2002). This industry should always consider state legislations at the time
of recruitment and selections the employees. However, in this sector the profitability ratio is
higher as compare to the other sectors of the country. In addition, the growth of this sector is
been driven by the changing life style of the consumer and the higher disposable personal
incomes.
This factor is the an important macro level issue for the travel and leisure sector as the profits
in this sectors helps in acquiring good position in the international market as compare to the
other sectors.
c. Social Factors
‘Travel & Leisure Sector’ has to follow and respect the social values and norms of the society
as it helps in maintaining the quality of the services provided in this industry. This unique
feature of this industry plays a vital role in popularizing the organisation among the regular
customers of the business. This innovative culture introduced by the travel and leisure sector,
because it helps in attracting the customers. However, if the culture involves the activities
such as drug usage, criminal activities and wrong behaviour of the public, then it can cause
negative impact on the mind-set of the customers, which is not good for this industry (Hall,
2000). In addition, the sector includes the major issue of child labour, especially in the
businesses related to food and beverages and it is the negative aspect of this sector.
This factor is macro level issue for the travel and leisure sector as if this industry is following
the corporate social responsibility and the norms of the society, only then the tourist will
enjoy and memorise the experience of the destination.

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d. Technological Factors
In recent scenario, the consumers have become techno savvy. The customers are now
attracted toward the new technologies and always wants that they deal with the companies,
which adapt the latest technologies (Craig Standing, 2014). It can be done by Travel &
Leisure sector, by creating the innovative domain with the help of trending technologies.
They have to provide best customers care services to their customers by providing them
various options with the help of updated technology. Technology plays an important role in
travel and leisure sector as it provide fast and cheaper services to the customer, which
enhance the comfort level of the customer.
Technological factor is the major macro level issue in ‘Travel & Leisure Sector’ as in this era
customers are friendly with the internet services and if the industry is not able to upgrades its
technology then it has to suffer with huge losses, as the customers will not find this beneficial
(Vasudavan, 2000, pp.45-54). Therefore, if the industry has techno shrewdness then only it
can boosts the business faster as compare to others.
e. Legal Factors
Every country has its own legal laws and regulations, which has to be the followed by the
‘Travel & Leisure Sector’. These laws and regulations must be considered by this sector as it
influences the travelling business directly or indirectly (Ahmad & Adaoglu, 2011). It is
important for the ‘Travel & leisure Sector’ to be on the safer side in the eyes of law and this
can only be done by following the rules and regulations enacted by the government.
This factor is macro level issue for the travel and leisure sector, as the industry needs to be
safer and legally sounded (Chen et al., 2016). They have to follow all the legal aspects of the
business and the government (Standing & Vasudavan, 2000). It ultimately helps in

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maintaining the good reputation of the business in the market, which attract the customer
towards the business.
f. Environmental Factors
In Travel & Leisure Sector, it is very important to maintain the environmental condition of
the country. This sector has to do the appropriate use of the fuel in the traveling businesses
and do not waste it (Ruhanen & Shakeela, 2013). The environmental factor needs to be
considered in the business significantly. Especially in the tourism businesses, it is very
important to secure the environment of the destinations because inappropriate use of fuel can
pollute the environment, which is not good for the tourism business.
This factor is macro level issue for the travel and leisure sector, as the industry needs to
maintain the environmental conditions by preserving them. By considering the environmental
aspects, this industry will secure a good position in global market.
Task b: Impacts at Micro Level
In the above paragraphs, macro-level issues in the travel and leisure sector have the potential
impacts at the micro level and this explained with the help of ‘Porter Analysis’ in the
following points with the help of examples.
a. The Bargaining Power of Customers
The buyers bargaining power reduces the role of intermediates of the firm, which hampers
the business as in recent era the customers have become techno-savvy and they instead of
dealing with one firm, they quickly switch to the other, as many options are available on the
internet (Čavlek, 2013). Therefore, it is very important for the company to upgrades its
technology.

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For example, the tour groups, who are associated with the different hotels, are as per the
requirement of the customers. This is done as the choice of buyers in more crucial for this
type of business. In addition, if the hotel sub-sector brings innovative ideas and update their
technology, then only the customer attract towards the business (wetravel, 2019).
Therefore, the bargaining power of the customer can create an impact at the micro level in
this business environment. If the customer is getting upgraded technology, he or she will not
switch to the other firm and it will ultimately increase the profitability of the firm.
b. The Threat of New Entrants
The new entrance has the major threats in this sector as if the political environment of the
country has secured good position in the global market it will attract the foreign companies to
invest in the domestic market, which is the major threat to the individual business.
For example, in hotels, the new entrance invests lots of money on the innovative offers,
which help them to establish their business in the existing market faster. This new entrance
will harms the existence of the domestic business of the hotels and it will cause capital loss to
the business.
Therefore, the new entrance can creates the impact at micro level in this business
environment, as if the firms choose the innovative idea in an appropriate manner after doing
the deep research on the market it might increase the profitability of the business and
decrease the chances of capital loss in the business (Medium Corporation, 2019).
Task c: Challenges & Suggestion
Challenges
These are the following challenges faced while doing the tasks:

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a. Finding the information for the task a and b
Finding the information is the substantial challenge faced while working on the task, as the
task contains deep research to finds the issues at the macro level and its impact on the micro
level. Therefore, lots of websites and authentic sources need to be referred while doing both
the task in an appropriate manner.
b. Linking both the task
After gathering the information for task ‘a' it becomes difficult to relate it with task ‘b' as in
task ‘a' there is the analysis of the issues at the macro level and in task ‘b', there is the
explanation of the potential impact at micro level due to macro-level issues. So to relate both
the task, lots of research involved.
Suggestions
The suggestions for overcoming the above challenges are as follows:
i. Find the information from the authentic sources
For doing the task in a correct and appropriate manner, it is important to use the authentic
sources, which gives the correct information. The information from the authentic sources
helps in understanding the concept more clearly and helps in reducing the work and the
liability of the work of only on the authentic sources and the websites.
ii. Link the task after the proper assessment
After gathering the information from the proper sources, it is important to link them correctly
after the proper assessment, as it will help in understanding the concept clearly at both macro
and micro level of the industry. In gathering the information for task ‘b', it’s important to

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assess the information of task ‘a’, which is only possible after the proper research from the
authorised sources.
Conclusion
From the above discussion, it can be said, that the ‘Travel & Leisure Sector’ has a wide
market and many competitors are there in this market. This sector has many significant key
macro-level issues in the business environment, which helps in understanding the position of
the firms in the market. In addition, there is a discussion of its impact at micro level issues
with the help of appropriate examples. These examples clear the picture of the macro level
issues' impact at the micro level. In addition, these issues explained in detail with the help of
‘PESTEL Analysis’ and ‘Porter Analysis’. There were different challenges faced while caring
out these tasks. All these challenges are mentioned in the above paragraphs. In addition, this
report also contains some suggestions to overcome these challenges.

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Bibliography
Ahmad, W. & Adaoglu, C., 2011. Cash management in the travel and leisure sector: evidence
from the United Kingdom. Applied Economics Letters, 26(7), pp.618-21. [Accessed 2019].
Brotherton, B. & Wood, R.C., 2008. The Inter-Relationships between Leisure, Recreation,
Tourism, and Hospitality. In B. Brotherton & R.C. Wood, eds. The SAGE Handbook of
Hospitality Management. UK: SAGE Publications Ltd. Ch. 3. p.90.
Čavlek, N., 2013. TRAVEL AND TOURISM INTERMEDIARIES: THEIR CHANGING
ROLE. 1st ed. UK: University of Queensland, Australia.
Chen, C.-M., Chiu, H.-H. & Hsu, C.-L., 2016. How does demand uncertainty affect food and
beverage capacity in the hotel industry? Current Issues in Tourism, 19(13), pp.1288-94.
[Accessed 1 May 2019].
Craig Standing, J.-P.T.-T.&.M.B., 2014. The Impact of the Internet in Travel and Tourism: A
Research Review 2001–2010. Journal of Travel & Tourism Marketing, 31(1), pp.82-113.
Hall, C.A.&.C.M., 2000. Migrant and foreign skills and their relevance to the tourism
industry. Tourism Geographies, 2(1), pp.66-86.
Kahle, E., 2002. Implications of “New Economy” Traits for the Tourism Industry. Journal of
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Medium Corporation, 2019. 6 ways in which technology has changed the way we travel.
[Online] Available at: https://medium.com/hijiffy/6-ways-in-which-technology-have-
changed-the-way-we-travel-f37f7b8c307e [Accessed 1 May 2019].

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[Accessed 1 May 2019].
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