Contemporary Issues Impacting the Travel and Tourism Sector

This report delves into the contemporary issues affecting the travel and tourism sector, focusing on the UK as a key destination. It analyzes factors driving change, such as security concerns, inflation, and the rise of low-cost airlines. The report assesses the impact of these issues and explores how international airline groups can respond strategically, including PEST analysis and the development of marketing and promotional strategies. It also examines the consequences of businesses failing to adapt to market changes and the importance of understanding evolving customer preferences and external factors. The report further investigates the impact of terrorism and political unrest in regions like the Middle East and North Africa, as well as environmental concerns, providing a comprehensive overview of challenges and potential solutions within the industry.

Contemporary Issues in Travel and
Tourism
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
1.1 Issues currently driving change in travel and tourism sector for the selected destination.....3
1.2 Analyse two different current issues......................................................................................4
TASK 2 (PPT).................................................................................................................................5
TASK 3 ...........................................................................................................................................5
3.1 How international airlines group businesses could respond to change..................................5
3.2 Develop strategies how the international airlines group respond to the change....................7
3.3 Justify the selected strategies.................................................................................................8
TASK 4 ...........................................................................................................................................9
4.1 Impact of issues and trends that drive change in the travel and tourism sector.....................9
4.2 Consequences of businesses failing to respond to market changes.....................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
In the modern scenario, travel and tourism sector is extremely volatile sector that assist
the growth and development of economy in generating income for the governing authorities. The
earned revenue or income is utilized by the government in renovating heritage and cultural
places which attracts the travellers and visitors towards the destination (Mowforth and Munt,
2015). The travel and tourism industry is highly dependent upon business and leisure travellers
that prefer to visit different destinations. But changes in the recent times suggest that there is an
increasing proportion of business and other non leisure traveller’s category in the total travellers.
Travel and tourism industry is exposed with the changes in apolitical, economic and health areas.
The present report focuses on understanding and examines different issues which are
faced by tourist destination across the world. Furthermore, the study also assists in understanding
and examining the ways through which industry can overcome those issues through enabling
strategic development. Lastly, the report will also study the impact and effect of various issues
and challenges that drive changes within the travel and tourism sector.
TASK 1
1.1 Issues currently driving change in travel and tourism sector for the selected destination
Working as an assistant manager within the tour operator is essential to analyse the
current issues existing within the industry that drive constant change within the travel and
tourism industry. UK is among the top 10 tourist destination among the world that is mainly
visited by the domestic and international visitors (Johnson, 2009). Therefore, through conducting
the research it has been identified that there is faltering trends in the inbound tourism for the year
2003 to 2014. In the year 2003, approx 24.72 million visitors have chosen UK as the tourist
destination for their visit. On the other hand, the visitors have increased to 34 million for the year
2014 (Blanke and Chiesa, 2013). Despite of the growing trends in travel and tourism sector there
are various issues existing in the market that directly impact the operations and activities of UK
tour operators for the selected destination that is UK.
 Security and terrorism issues: The foremost issue that is currently driving change in the
travel and tourism sector includes security and terrorism issues. Since, after the attack on
Twin Tower in U.S. On September 1, 2001 all leading destination has focused on security
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at the airport to avoid such issues in the future (Travel and Tourism, 2014). In order to
overcome the problem, government emphasizes on hiring tourism office as well as
visitors bureaus that will be in contact with local police department of the locality. Thus,
is can be stated that security and terrorism is the key issue which is faced by the travel
and tourism sector.
 Rise and fall of inflation: Another challenge or issue that is commonly faced by travel
and tourism sector include rise and fall of inflation rate in UK economy. With the rise in
inflation rate it results in increasing overall rate and prices of various services which will
directly affect customer’s standard of living (The History of British Tourism, 2014). On
the other hand, at the time of inflation it will result in lowering predictable rate which
will result in reducing price level. Thus, tour operators at the time of inflation will lower
the rate of their travel packages so that they can attract visitors and customers. For
instance, UK has face recent recession that results in lowering the demand of travel
services among the customers as the individual level of disposable income get reduced
with the recession. As, the employment level within the recession also get reduced which
results in falling the inflation rate.
 Low cost airlines/cruises: Another issue within the travel and tourism sector is increasing
segment of low cost airlines and cruises that affect overall operations and activities of
tour operators operating in the sector (Tourism Industry Structure, 2014). It has been
analyzed that tour operators in UK are offering premium travel services to their
customers but with the entrance of low cost airlines and cruises customers prefer to select
their services instead of premium services. Therefore, it may act as the problem that
drives constant change in travel and tourism sector.
1.2 Analyse two different current issues
In the contemporary scenario, there are different issues within the sector that affect the
businesses of tour operator in the assorted manner (Nand, 2012). Through considering the given
scenario of Middle East and North Africa as the tourist destination, there are large number of
travellers and visitors would gain the insight knowledge regarding the culture of destination.
Through researching the destination, it has been determined that terrorism is cardinal issues
within destinations and it negatively impact perception of customers regarding the destination.
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With the increasing terrorism activities and theft activities, it results in increasing ratio of
customers those who do not prefer to visits such places (Mehmetoglu and Normann, 2013).
Furthermore, political unrest in Middle East and North Africa is also considered as the modern
issue that impact and influence the perspective of visitors and travellers.
In addition to this, economic and legal issue also results in creating negative effect on
work conditions that is failure in economical aspects outcome in increasing level of
unemployment in the region. Thus, it reduces availability of manpower in the travel and tourism
sector which results in rendering proper leisure and luxurious services to travellers and visitors
(Matias, Nijkamp and Sarmento, 2009). Moreover, it has been measured that government must
focus on imposing such policies within destination so that complexion within the process gets
reduced and which will result in enhancing the experience of visitors related with stay in Middle
East and North Africa.
Despite of all these, there are certain environmental issue which also influences
customer’s perception in a negative manner. It has been identified that the increased ratio of
visitors at the destinations also enhances the rate of environmental degradation. Thus, it is
necessary for authorities and travel sector to make sure that the policies are designed in an
appropriate manner so that issues can be overcome (Page, 2014). Further, the destinations have
to face several environmental issues such as pollution, resource depletion, endangerment of flora
and fauna, climatic change, etc. It is necessary for business firms to effectively design policies so
that goals and objectives can be accomplished in a desired form.
TASK 2 (PPT)
TASK 3
3.1 How international airlines group businesses could respond to change
In order to succeed in the competitive business environment organization rendering
services in the ravel and tourism sector must respond to the certain changes (Aragon-Correa
Martin-Tapia and de la Torre-Ruiz, 2015). International airlines group are the association of
airline company that provide travel services and facilities to all travellers and visitant so that they
can easily travel from one destination to another. Therefore, with the changing need and demand
of customers airline group must respond to the change. For this, airline group need to investigate
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the external environment so that they can easily determine the individual need and demands
(Timothy, 2014). For instance, in the present scenario, visitors are keen interested in purchasing
the low cost travel services. With regard to this, airline company must focuses on adopting
competitive pricing policies so that they can easily succeed in accomplishing the goals of
rendering low cost services to their customers. In addition to this, international airline group
rendering services in UK must analyse their external environment through conducting PEST
analysis in order to determine the external factor that assist the company to respond to the
changes (Weidenfeld, 2013). Another example include that with the changing scenario
preferences of customers towards the destination keeps on changing. For this international airline
must target new destination and start airline service within the new destination so that they can
meet the requirement of customers. In addition to this targeting the new destination will also
assists in enhancing the reach of airline in the new region. The external analysis of UK include-
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Factors
Political The political factor within the UK is in the stable form that ensure
reduction in the interest rate from 12 to 10%. moreover, the political
factor of UK include increase in the tax rate that overall affect the
international airline groups in increasing the tax rate that they charge at
the time of purchasing the air ticket.
Economical Another factor is economical factor within UK that ensure availability of
low price services and travel products that keep attract the customers
towards their services.
Social The social factor within the UK include that there are diverse culture
customers and visitors that prefer to visits the historical and cultural
destination (Werthner and et.al., 2015). Therefore, with the social change
airline group must respond according to them that is they would mainly
covers the destination that are preferred by the customers an visitors.
Technological Another factor is technological factor that regarded as the significant
factor that support the international airline group in targeting the large
customers and visitors towards their services (Phillips and Moutinho,
2014). With the technological factor airline group must also focus on
improving their information system and communication network.
3.2 Develop strategies how the international airlines group respond to the change
For responding to the change international airline groups such as British Airways as well
as Iberia need to develop certain strategies that would assist them in adopting or responding to
the changes. With the respond to change international airline will develop certain strategies that
may results in adopting change or resisting change by the staff or employees of the airline.
These For instance, with the rise in inflation rate within UK it may results in increasing the level
of prices of different services and products. In order to respond the rise in price level British
Airways must ensure development in their travel services that they provide to their customers
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and visitors. With the help of creating the new services they may introduce new services that
they provide to the visitors in their flight so that they may have pleasant experience (Wearing
and McGehee, 2013). With the rise in price airline businesses is providing range of services then
it would be accepted by the visitors. Therefore, change in services in flight package assist in
attracting visitors and outcome in rendering proper resistance of change. International airline
group that is British Airways make sure that services that are opted by customers are according
to their need and interest. In addition to this, international airline groups must also focus on
adopting different marketing strategies so that they can easily respond to the change (Pratt and
Harrison, 2015). With the marketing strategies they can easily attract the large customers and
visitors towards their services.
On the other hand, Iberia to respond the changes as per the needs and recent trends
company must focuses on adopting various promotional activities. With the help of promotional
activities businesses would properly create the awareness regarding the change that need to done
by the staff and employees within the organization (Yuan, Gretzel and Tseng, 2015). Therefore,
it is also stated the airline business must focuses on transforming or modifying the marketing
mix elements in such a manner that airline group can easily meet their objectives and aims. Thus,
marketing strategies as well as marketing mix is used by Iberia business to defeat the weaknesses
and raise the activities of travel and tourism sector.
3.3 Justify the selected strategies
According to the above developed strategies both the airline group that is British Airways
and Iberia have selected the appropriate strategies as it would support them in easily accomplish
their aims and objectives. It has been known that the strategies that have been implemented
within the airline businesses assist them in bringing transformation and amending their services
in the effective manner (Hannam, Butler and Paris, 2014). Thus, implementing the strategies
swill also provide an opportunity or the international airline groups to succeed in the
international and competitive advantage. The aviation sector mainly assist in rendering services
related with conveyance facilities from one destination to another. Thus, the sector plays
significant role in transferring visitors from one geographical location to another. The business
mainly focuses on creating or designing the new travel package for the customers so that they
can respond to change in the prices factor. With the proper scheming of flight packages
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according to the requirement and need of customer it outcome in facilitating the expectation of
customers (Kim and Ritchie, 2014). In addition to this, through conducting the market research it
may also consider as the appropriate for the British Airways because it assist in determining
number of key needs that requirement that is to be consider for enabling the success.
Designing the marketing activities is also consider as the effective strategies for the
airline businesses as it support the company in creating the awareness among the market. The
strategy is beneficial for or the airline group as it results in increasing the sales and achieving the
profit margin ratio. The airline group must customization their services according to the
industrial standards and need of travellers that assist in making more revenues and earning
income (Connell, 2013). For attracting the visitors and customers marketing programs as well as
effectual promotional technique plays significant role and results in responding to the change in
the proper manner. Moreover, with the changes in tax taxation and responsibility planned by the
government also outcome in influencing and affecting the activities of airline group. Therefore,
pricing strategy is also appropriate for the business organization because it alleviate in attracting
more and more customers. Usage of competitive pricing strategy render quality to sustain in the
marketplace because it allows enterprise to offer low monetary value travel services as compared
with the competitor airline groups in the market (Buhalis and Foerste, 2015). Furthermore, it has
been justified that considering the market conditions during designing of activities is also
advantageous for the airline group because it help in accomplishing goals and objectives.
TASK 4
4.1 Impact of issues and trends that drive change in the travel and tourism sector
According to the case scenario, Thomas Cook is the leading operator within UK that
focuses on delivering travelling, accommodation as well as other services for the visitant and
traveller, thus, it has been determined the independent travel company faces certain issues and
trends that drive continuous change in the travel and tourism sector (Mowforth and Munt, 2015).
The different issues and trends that drive changes are as follows-1. Rise in the fuel cost: The key issue within the travel and tourism sector include rise in the
fuel cost. Thus, the change in fuel cost results in affecting the activities and operations of
the Thomas Cook as the increase in prices will results in changing the air fare that further
impact the overall travel package (Telfer and Sharpley, 2015). It has been also assessed
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that with the increase in fuel prices results in heighten the pricing or monetary value of
the transportation services that are offered by Thomas Cook. In regard with this, it will
also results in forcing Thomas Cook to hike the prices of budget to gain cost associated
with fuel cost.2. Euro crises: Another issue that is been identified within the travel and tourism is related
with Euro crises. With the Euro crises it may results in lowering the consumption level of
customers as their income level get reduced (Wachowiak, 2016). Thus, with the euro
crises it may result in increasing the rate of unemployment within the market that will
negatively impact the services of Thomas Cook as there are no qualified and competent
personnel that results in delivering the quality services.
3. E-tourism: The identified trend within the travel and tourism sector include increasing
technology that results in enabling E-tourism. This trend will drive continuous change in
the activities sand services provided by Thomas Cook in the travel and tourism sector.
Through using the Information and communication technology visitors or travellers can
easily select their destination via online platform and also compare the services offered
by different tour operators (Lytras and Miltiadis, 2010). Thus it is analyse that there is
positive impact of trends that is growing use of internet technology as visitors prefer to
chose their destination that render best deal and offering range of merchandise like
flights, accommodation, rental car services etc. hence, the E-tourism tendency positively
effect the sector by reducing the load of booking.
4.2 Consequences of businesses failing to respond to market changes
If the businesses that is Thomas Cook fails to respond to the market changes then it may
results in attaining several outcome that is it may results in reducing the ratio of sales and profit
for the tour operator. For instance, with the emergence of low cost services in the market Thomas
Cook must introduce the low cost services for their customers so that they can attract and retain
them. In the situation of Thomas Cook is unable to provide low cost services to their customers
then in such situation customers and visitors will prefer to opt the services of other tour operator.
Thus, consequence will be negative for the Thomas Cook it results in decreasing their gross sales
of travel products and services, decrease in profit ratio, customer shift towards the services of
another tour operator etc. It is essential for the tour operator to respond to the modern changes
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so that they attain position in the market. The several consequences of businesses failing to
respond results in-
1. Reducing the sales and profitability ratio- The key outcome results in reducing or
lowering the sales of their travel products and services that further impact the profitability
of Thomas Cook (Knowles, Diamantis and Mourhabi, 2014). The company need to
respond with the changes in order to succeed in the environment thus, if the business fails
to respond visitors will prefer to choose travel products and services of other travel
operator.
2. Change in attitude- If the Thomas Cook Fails to respond to the market changes it may
results changing the attitude and perception of customers, suppliers and rival companies.
With the increasing trends in travel and tourism sector tour operator is focusing on
designing travel packages with the new destination (Beaver, 2015). If Thomas Cook is
unable to respond with the change in new travel destination then it may results in shifting
the customers towards another tour operator that are offering wide option of destination
for travelling purposes.
3. Negative impact on business- In addition to this, if the Thomas Cook is unable to
respond the change it may also outcome in enabling negative image of business among
the rival tour operators. As, it has been analysed that Thomas Cook is ineffective in
responding to the change (Anheiser, 2011). Therefore, to succeed in the market it is
essential for Thomas Cook to resist or cope up with the change as competitors are
adopting the changes to survive in the market. Therefore, failing to respond to the change
it may results in attaining negative impact on the image of businesses.
CONCLUSION
Through the aforementioned report it is summarizes that travel and tourism sector is the
quickest growing sector within the UK economy. The above report has recommended that there
are contemporary issues existing in the market that act as the driving force within travel and
tourism sector that different issues are related with security and technological issues. While, the
report has also provide an insight knowledge regarding the current an latest trends within the
travel and tourism sector that is green tourism, sport tourism etc. all these tendency help in
processing and rising the UK travel and tourism sector so that travellers may have leisure and
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luxurious stay within the destination. It has also advisable the assorted ways and plan of action in
which the businesses in the travel and tourism adopt the cope up with the changes. Furthermore,
the report has also analyse the consequence of the issues and trends that thrust changes in the
sector that outcome in negative image of the business, decreased sales and profitability ratio etc.
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