Impact of Inflation on Tourism Sector: A Case Study of Verdant Leisure

This report analyzes the impact of inflation on the tourism sector with a case study of Verdant Leisure. It discusses inflation management strategies, types of data used to measure inflation, and the impacts of inflation on the company's operations and performance. The report also provides insights into the ways the government can ease inflation in the tourism sector. The report concludes that the high inflation rates after the COVID-19 pandemic have affected the tourism sector, and the government has taken measures to ease the negative impact of inflation on businesses involved in tourism.

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Introduction
Inflation is defined as the increase in the prices which decreases the buying power of the customers
over time. It is the rate at which the purchasing power of the customers dropped, but the average
price of the selected goods increases. Inflation is in direct comparison with deflation, where the
prices of the goods and services decreases and the buying power of the customers increases.
Inflation is aiming at measuring all the changes which are affecting the overall economy of the
country. It is seen that inflation has rose after the rise of the COVID-19 pandemic, which had
affected the supply and demand of the goods and services. The companies are not able to meet the
demands of the customers due to the increase in the prices (Khan and et. al., 2022).
Key operations and markets
The small businesses in the UK are likely to struggle with the range of personnel issues. It is
seen that COVID-19 pandemic had created personnel issues which face external challenges with
the help of inflationary pressures. The four key areas are highlighted below-
•Cost of living crisis in destroying budgets- Many people that are running the small businesses
are in problem with the high cost that the inflation is bringing in. Not only that but the issues that
are globally present that are related to the finances could also be a problem to them. More than
ninety percent people said that the cost of running these businesses are too much in consideration
to their style of living.
•Challenges in recruitment continue to take heavy toll- Verdant faced lots of issues while
dealing with the recrSmallrocesses that included the salary issues and the interview processes
(Ozdemir, Ar and Erol, 2020). Another issue that has been a dilemma for them is the resigning of
many employees from the company just after joining the company.
•Attrition of staff is fuelling the concerns and wage inflation- The company is facing lot of
challenges while dealing with the retirements and the problems that involves in covering up the
vacancies. Retirement is one issue that has been an issue for the company.
•Hybrid work continues – Almost many decision makers are formulating the strategies to work
out the hybrid phase plan and make the employees come out of it. The factors like equity and
diversity are not a preference for many of the small businesses.
Conclusion
From the above report it is concluded that inflation rates have become very high after
the rise of the COVID-19 pandemic, this had affected the tourism sector a lot. The
firms which are operating in tourism sector are affected as their businesses have
suffered a lot in the great extent. The government has taken various measures which
had ease the negative impact of the inflation on the business involved in the tourism
sector.
Inflation management
strategies deployed
Several ways which are used by the government in easing the inflation in the tourism
sector-
•Streamline the public and private interface by tourism nerve centre- Before the
pandemic the tourism authorities are aiming on the destination advertising (Rashideh,
2020). With the focus on the leadership in the central system, there is a management
crisis which had caused deployment in many of the business organization.
•By ensuring the transparent and constant communication on protocols-
International authorities have made many new rules and regulations which are
serving the baseline (Rochon, 2022). Verdant Leisure have merged the policies which
ensures effective communication with the protocols.
Company background and overview
This report is about Verdant Leisure, it is a private firm which is offering holiday homes to their
customers. The company is the customization of the holiday park which is offering ownership of
the self- catering holiday homes. The company is headquartered in Lanchester and was established
in September 2010.
References
•Khan and et. al., 2022. Alternate energy sources and environmental quality: The impact of inflation dynamics. Gondwana Research, 106, pp.51-63.
•McNally, M.A. and Maroun, W., 2018. It is not always bad news: Illustrating the potential of integrated reporting using a case study in the eco-tourism industry. Accounting, Auditing & Accountability Journal.
•Ozdemir, A.I., Ar, I.M. and Erol, I., 2020. Assessment of blockchain applications in travel and tourism industry. Quality & Quantity, 54(5), pp.1549-1563.
•Pencarelli, T., 2020. The digital revolution in the travel and tourism industry. Information Technology & Tourism, 22(3), pp.455-476.
•Rashideh, W., 2020. Blockchain technology framework: current and future perspectives for the tourism industry. Tourism Management, 80, p.104125.
•Rochon, L.P., 2022. The general ineffectiveness of monetary policy or the weaponization of inflation. In The Future of Central Banking (pp. 20-36). Edward Elgar Publishing.
Explanation of types of data
Inflation is used for measuring all the aspects of the economy, which involves business investment,
consumer spending and tax rates. Measurement techniques used to identify inflation are described
below
• Consumer Price Index-
• Personal Consumption Expenditure(PCE)
• Inflation Base year
Impacts of inflations on company’s
operations and performance
Negative
• Erodes the power of purchasing- The main effect of the inflation on the Verdant Leisure is the decrease in the
consumer's purchasing power which will effect the consumption from the consumers .
• Hurts poor’s disproportionately- The consumers which are having less income and are likely to spend their
major part of income on necessary things are compared with the high income and are having less cushion for the
purchasing power.
Positive
• Low debt cost of service- The new customers have to face high interest rates when there is a rise in the inflation
rates and the mortgage fixed rates.