Tourism Impacts and Strategic Management Analysis

This assignment requires a critical analysis of various aspects of tourism management and its impacts on environments and communities. Using the provided research papers as references, students should examine topics such as environmental governance, strategic management, medical tourism barriers, rural community attitudes towards tourism, and the effects of climate change mitigation constraints on tourism travel. The goal is to develop a comprehensive understanding of these issues and propose strategic management solutions for sustainable tourism development.

TRAVEL AND
TOURISM SECTOR

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Historical developments in travel and tourism sector ..........................................................2
1.2 Structure of the travel and tourism sector............................................................................3
TASK 2 ...........................................................................................................................................4
2.1 Function of government, government sponsored bodies and international agencies............4
2.2 Impact of local and national economy policy on tourism.....................................................6
2.3 implications of political change on the travel and tourism sector.........................................7
TASK 3............................................................................................................................................9
3.1 Factors affecting tourism demand........................................................................................9
3.2 Changes in supply to meet the demand.................................................................................9
TASK 4..........................................................................................................................................10
4.1 Positive and negative economic, social and environmental impact...................................10
4.2 Suitable strategies to reduce negative impacts....................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
1

INTRODUCTION
Travel and tourism is one of the fastest growing sector in today's environment. The world
travel and tourism council indicates that tourism sector is now capable to generate more than
10% jobs for global economic output. It also helps people to get knowledge about more places
which are famous in world. The motive behind tourism is to spent some quality time with nature
in order to reduce day to day stress (Saha and Yap, 2014). The present report is based upon TUI
it is one of the leading travelling company; it has own travelling agencies, hotels, airlines, and
retail stores. The firm has overall revenue of €17,184.6 million. Apart from this, the report will
be describe historical development in travelling sector. Organisational structure of travelling
sector will be also discuss in this assignment. Readers will also come to know the impact of
certain external factors on travelling companies. Managers need to develop appropriate policies
and strategies in order to increase market share.
TASK 1
1.1 Historical developments in travel and tourism sector
2

3

1.2 Structure of the travel and tourism sector
4

1.2 Structure of travel and tourism
5

TASK 2
2.1 Function of government, government sponsored bodies and international agencies
6

7

8

9

10

11

2.2 Impact of local and national economy policy on tourism
12

13

14

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2.3 implications of political change on the travel and tourism sector
TRAVEL AND TOURISM SECTOR
Date: 26th October 2017
State of Political environment is differ country to country and its effect the overall
economical change for that particular country. The overall case study is about the impact of of
political changes on travel and tourism businesses. Tourism sector is one of the largest growing
sector, it is being affected by different political factors. TUI is served in different countries as its
main motive is gain high market share from these countries. Political environment plays a vital
role for an organisation and its roles and responsibilities are different as per the nature of the
field. The sectors which involve economical growth, development and employment, political
environment help as a boost factor to encourage that sector. Travel and tourism business is one
of the sector which helps a country to gain an opportunity to make its identity at universal level.
Countries which have uncertain political conditions have to suffer the political changes. Travel
and tourism is a sector which helps to raise national fund by inflow foreign currency reserves
and funds. Beside this, foreign exchange reserves is essential in respect of dealing deals with
international trading and transaction.
Changes in political environment are being affected directly and indirectly on the growth
and performance level of tourism sector. In this perspective, managers have to regulate certain
policies and norms which are related to the tourism business as it does not get affected from
any political change in any country. Apart from this, changes in political parties is known as
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major political change for a country; because politicians implement rules and regulations as per
their point of view. Mostly it is seen that countries which have uncertain political situations do
not play with the policies linked with the countries economical structure. Tourism is also one of
the sector which is highly responsible for economical growth and development of a country.
For preventing any misuse of national assets and heritages, government makes some set
of rules and regulation for tourism sector to operate smooth and compliant practice. Many travel
agencies breach rules and regulations to make extra benefits from tourist, this unethical practice
harm the structure of the tourism and present an unfair picture of the nation to outsiders. For
example- China government had prepared certain laws and regulations towards travelling. It is
very much essential for all people who are related with this field. It can directly affect on
Chinese bookings and its tour operators was not preferred to go London and Europe trips.
Britain has to face the negative results after a historical political change in the history of
Britain. Britain has to isolate from European union and it has to face positive effect of this
change in the sector of tourism. The number of tourist were record at large number compare to
decades. Number of tourists from china became increase due to changing in the rate of currency.
Pound rates fallen in compare to Yuan. British government has been also renewed its visa
policy from two months to six months, so that people can really enjoy it. This political change
has positive effect on Britain tourism sector in comparison to other sectors.
Political change in respect of Britain remained positive because of there were lots of
restriction for tourist and outsiders to stay and visit Britain. Most of the legal strategies and
policies were worthless but needed to follow because it was the part of European Union at that
time. Government of Britain was also getting unable to maintain its tourism sector and promote
it.
Political changes have many Negative effects like :-
 Unable to Categories the report of best tourism places of the country.
 Mismanagement in maintaining the structure of the tourism.
 May decrease the amount of tourists.
 It affect the demand of tourism in China, as there people does not prefer to visit London
and Europe due to high foreign exchanges rates..
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TASK 3
3.1 Factors affecting tourism demand
Below mentioned certain factors which can affect the demand of travel sector: -
Economy – Economic condition of a country also affect the demand of travelling. It
involves, currency rates, income level, unemployment, interest rates etc. which can put a huge
impact on growth and success of TUI. For example- if the currency rate of any country is higher
then it can reduces of the demand of tourism because will not prefer to go such places which are
on financial suitable for them (Erkuş-Öztürk and Eraydın, 2010). Apart from this, inflation rate is
also an important factor which might be influenced the demand of travelling. The growth and
success of tourism destinations got affected by several economic fluctuations in these such
countries, i.e. Spain where the number of visitors are highly responsible for increasing GDP rate
of the country. Economic environment of the country influence expenditure pattern of clients. It
is essential for travelling companies to determine the future impact of economic environment;
they also have to analyse the demand for their services
and the costs of supplying those services.
Political laws – Various political laws and legislations also affect purchasing power of
visitors. Political factors also includes instability of government. For example- if UK government
is changed regularly then will influenced the opinions of people towards a country. Along with
this, tourism entities also get affected by several new and existing rules and regulations. It is
essential for travelling companies to understand the political power of the location; sometimes
due to political instability, attractiveness of tourism destination also hamper. There are several
opportunities and threats in changing political environment, such as- competition policy, health
and safety, global carbons agreements and targets, foreign policies, minimum wages, travel
advisories, employment and training policy regulation and deregulation etc.
Technological advancement – Due to technological advancement, travelling companies
are now tend towards adopting effective tools so as to deliver maximum satisfaction level to
them. It need more investment and capital (Evans, Stonehouse and Campbell, 2012). But
business organisations, which do not have proper amount of amount cannot spend more money
of technological expansion. Due to this, customers are dissatisfied and this will be influenced
their purchasing power very strongly. Technology may result in improving in organisational
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product and subject to new forms of competition. Technological environment is classified into
two parts, such as- information communication technology and other technology and other
technology. ICT relates with information search, post travel engagement, purchase of services
and networking. Information technology also helps people to make reservation or advance
booking for hotels, airlines and attraction. Apart from this, there are several other technologies,
such as- constructional technology, bridge technology, materials, fuels etc. also affect tourism
destination in positive and negative manner.
Social cultural environment – Factors which are involved in socio-cultural environment,
such as- size and structure of population, interest and choices of people, life styles and inter-
cultural differences, attitude, believes, morale of visitors.
3.2 Changes in supply to meet the demand
In order to get high competitive advantage, managers of TUI need to emphasis on
changing their supply pattern. With this assistance they can easily achieve their goals and
objectives in certain time period. Along with this, they need to adopt effective tools and
techniques and hire well qualified or skilled staff members who are capable to deal with
customers in an effective manner (Tourism Management – Introduction, 2017). While supplying
effective services, firm need to give importance to information, promotion, qualitative products
and transportation. For instance- TUI need to expand its hotel areas by constructing rooms and
other facilities. They also tries to understand the need to customers; this would aids in
establishing an equilibrium between demand and supply (Deery, Jago and Fredline, 2012).
 However, seasonality is the prime key factor between the concept of demand and supply.
Due to peak sessions, when there is a lot of demand of travelling at this, firm need to
make higher prices of its hotels and other services in order to control demand. This would
also helps in increasing profitability of the firm in a certain time period.
 In competitive era, it is too difficult for companies to achieve their goals and objectives.
Therefore, tour operators have to prepare an effective tourism plan which can fulfil
customers' demand properly. For example – TUI has several competitors as it performs at
global
 Sometimes due to dynamic nature of environment, it is too difficult for companies to
supply services as per the needs and wants of people. Therefore, production process
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should be proper and adequate that is able to achieve goals and objectives of the
company.
Tourism is well suited to the concept of the supply chain because the product, service or
experience that is consumed is assembled, and comprises a wide range of suppliers. All too often
our knowledge of the supply chain is quite restrictive, since a wide range of components are
consumed in tourism including the use of leasing, franchising or managing properties and
operating over 3500 hotels worldwide with 537 000 guest rooms in 100 countries. This had
expanded further by 2008 to 590 000 rooms in 4000 hotels in 100 countries with 160 million
staying guests. The supply of tourism bars, restaurants, handicrafts, food, infrastructure and
related services are responsible to increase the demand of tourism and affect customers' interest.
TASK 4
4.1 Positive and negative economic, social and environmental impact
Factors Positive impact Negative impact
Economic The positive impact of economical factor
is, it helps in maximising GDP rate of a
country. As travelling industry has
contributed a lot in economic growth and
expansion. Therefore, it would increases
gross domestic product rate. Along with
this, if the income level of the people is
good then they can easily spend more
money on travelling and further entertain
activities.
Tourism expenditure create higher
income for host economy; it can stimulate
necessary investments in order to get
financial growth of the country.
Tourism also helps an economy to
generate foreign exchange earnings at
least 38% of countries.
It negative impact, sales and profits of
travelling business is rely upon seasons.
Due to this, it is not able to provide job
opportunities to people for long term
period.
Apart form this, economic recession in
UK is still affecting financial position
of the people, they hardly able to fulfil
their basic needs and wants.
There are several hidden charges which
can put unfavourable impact on
economic growth to the hots country.
Least developed nations needs more
income, employment and rise the
standard of living in terms of tourism
but they are least able to achieve these
benefits.
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Tourism also contributes in government
revenues in direct and indirect manner.
For example- direct contribution arises
from taxes on income from tourism
employment whereas indirect
contributions come from taxes are levied
on goods supplied to tourists.
For example – UK's tourism can also benefit
economies at regional and local levels, as
money comes into urban and rural areas which
in turn stimulates new business enterprises for
TUI, greater markets and promotes a more
positive image of the area. The income
generated helps the national balance of
payments, earning revenue through direct
taxation, as well as from indirect taxes on goods
and services purchased by the tourists.
Social In this sector, customers are belong from
various cultural and backgrounds by
having diverse view points. TUI group
gives opportunities to all people by giving
respect to their values and morales (Chen,
2011). Apart from this, cultural people
able to gives effective ideas for business
expansion.
It has the potential in order to promote
social development through generating
employment, income redistribution and
poverty alleviation.
Revaluation of cultural and traditions
Encourage civic involvement and pride.
Now a days, customers needs and wants
are rapidly changed, and it is too
difficult for managers to determine
them in an adequate manner. If
customers will not get higher customer
satisfaction then they will switch to
another companies which reduces sales
and profits of TUI.
In several countries, strict standards
regrading the behaviour and appearance
of people.
Tourism in many countries often
disregard, ignoring the prevalent dress
code and wearing half dresses, i.e. short
skirts can hurts values and believes of
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For instance – TUI focuses on improving the
infrastructure and new leisure amenities that
result from tourism also benefit the local
community. It also encourages the preservation
of traditional customs, handicrafts and festivals
that might otherwise have been allowed to
wane, and it creates civic pride.
local communities.
Sexual exploitations of children and
women has paralleled the advancement
of tourism in several parts of the world.
Environm
ental
factors
In modern era, tour operators are tend
towards doing these activities, i.e.
security of wildlife. For this purpose,
government also provides funds to them;
it is great contribution of travelling
companies in environment.
Tourism helps to promote conservation of
wildlife and natural resources such as rain
forests, as these are now regarded as tourism
assets. It also helps generate funding for
maintaining animal preserves and marine parks
through entrance charges and guide fees. By
creating alternative sources of employment,
tourism reduces problems such as over-fishing
and deforestation in developing nations.
Due to technological advancement, the
number of tress are decreasing.
Travelling organisations are stared to
harm natural resources.
Development of facilities and
subsequent tourist use may result in
rapid or more gradual effects on
habitats.
4.2 Suitable strategies to reduce negative impacts
In order to reduce the impact of external factors, business owners needs to adopt effective
and appropriate strategies for overcome with these barriers. Firstly, they need to provide proper
wages or remuneration to people who gives their services in travelling sectors. For improving
their current skills and capabilities, managers need to conduct certain training session. Along
with this, managers also have to they need to generate and regulate certain market campaigning
in which people can learn about harassment and exploitations of travelling companies as they can
aware from it (Wang and et. al., 2012). As TUI operates in Spain, Greece, Turkey, Egypt and
Thailand; these countries have different cultural and values. Therefore, TUI needs to prepare
suitable strategies and policies which can befitted in all nations and also ensure company's
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growth and success. For example- in order to reduce political impact TUI can analyse the
political condition of a country, their laws and legislations. On other hand, TUI can also enforce
strict laws, which will assist tourists to understand what kind of things must be bought to
location that will not affect environment. For minimising technological impact travelling
industry has to be upgraded with all new tools and techniques of production. Furthermore, they
need to promote tourism benefits in order to attain and retain customers. Certain environmental
activities also have to regulated by starveling companies for contributing in environmental
protection.
Some major strategies by which the negative impacts of tourism can be reduced, such are as-
 Providing an option for tourists to stay with the local instead of living special resorts and
hotels that have constructed for them. This affects the environment to a much smaller
extent. In addition, tourists are able to share the way in which the local lives, which could
be totally differ from their own.
 Educating tourist about their impact on the environment of the tourists destination and
telling them how they can keep it as low as possible.
 Ensuring the number of tourists who visit the location is sustainable so that tourists does
not cause a damage which would soon make the place unattractive for tourists.
CONCLUSION
From the above mentioned report, it has been summarised that travel and tourism is now
becoming one of the successful industry in world. From ancient to modern time, there are a lots
changes in travelling sector. Along with this, organisational structure of travelling companies is
also liable to improve the quality of services as well as increase the number of visitors. But in
order to per from effectively in UK market, travelling industries have to follow up government
laws and regulations in an ethical manner. Apart from this, business owners also have to make
certain impressive changes in their supply pattern in order to enhance profitability. In order to
diminish the impact of external factors several suitable strategies has to adopted.
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REFERENCES
Books and Journal
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Deery, M., Jago, L. and Fredline, L., 2012. Rethinking social impacts of tourism research: A new
research agenda. Tourism Management. 33(1). pp.64-73.
Erkuş-Öztürk, H. and Eraydın, A., 2010. Environmental governance for sustainable tourism
development: Collaborative networks and organisation building in the Antalya tourism
region. Tourism management. 31(1). pp.113-124.
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Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and
tourism. Taylor & Francis.
Goeldner, C. R. and Ritchie, J. B., 2012. Tourism: principles, practices, philosophies (No. Ed.
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Heung, V. C., Kucukusta, D. and Song, H., 2011. Medical tourism development in Hong Kong:
An assessment of the barriers. Tourism Management. 32(5). pp.995-1005.
Kimbu, A. N . and Ngoasong, M. Z., 2013. Centralised decentralisation of tourism development:
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Látková, P. and Vogt, C. A., 2012. Residents’ attitudes toward existing and future tourism
development in rural communities. Journal of Travel Research. 51(1). pp.50-67.
Medlik, S., 2012. Dictionary of travel, tourism and hospitality. Routledge.
Moutinho, L. ed., 2011. Strategic management in tourism. Cabi.
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Saha, S., and Yap, G., 2014. The moderation effects of political instability and terrorism on
tourism development: a cross-country panel analysis. Journal of Travel Research. 53(4).
pp.509-521.
Seetanah, B., 2011. Assessing the dynamic economic impact of tourism for island economies.
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Online
Tourism Management – Introduction, 2017. [Online]. Available through:
<https://www.tutorialspoint.com/tourism_management/tourism_management_destinatio
n.htm>. [Accessed on 26th October 2017].
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