Analysis of Contemporary Issues in Travel and Tourism (BTEC HND)

This report provides a comprehensive analysis of contemporary issues in the travel and tourism sector, focusing on the challenges and opportunities faced by businesses like the TUI group. It examines the impact of technological advancements, rising terrorism, environmental conditions, and political instability on the industry. The report assesses current market trends, including the decline in airline costs and the rise of online booking systems, and evaluates how these trends are changing the sector. Furthermore, it explores the strategies adopted by international airlines to respond to these changes, along with the consequences of failing to adapt. The report also investigates the impact of various factors on the tourism sector. Through detailed analysis, the report offers insights into the dynamic nature of the travel and tourism industry and its responses to change.

CONTEMPORARY ISSUES
IN TRAVEL AND TOURISM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Analysis of issues presently making amendments in travel and tourism.........................1
1.2 Evaluation of present issues utilizing suitable methods and resources............................2
TASK 2............................................................................................................................................3
2.1 Assessment of new trends causing change in relevant sector..........................................3
2.2 Analysis of single trend utilizing suitable techniques......................................................5
TASK 3............................................................................................................................................6
3.1 Assessment of response of international airlines group towards change.........................6
3.2 creation of strategies for international group of airlines for responding change..............7
3.3 Justification of strategies for cited firm to respond to change..........................................9
TASK 4..........................................................................................................................................10
4.1 Analysis of impacts of problems that causes change in relevant sector.........................10
4.2 Elaboration of consequences that fails businesses to respond market change...............11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Travel and tourism is recognised as key main player in providing growth and
development by continuously driving change in the economy at a high scale. It is also considered
as major contributing sector in raising the GDP of countries and increasing employment
opportunities rapidly (Connell, 2013). As a part of international business sector, it has provided
major increase in the revenue to the countries like UK. In this context, analysis of TUI group is
done as an assistant manager to provide the complete understanding about the contemporary
issues that causes major changes in this particular sector and also described strategies that
adopted by the international firm to respond the changes. Along with this, various methods and
techniques have been identified which are used to analyse the impact of changes. It is to
acknowledge that the economic impacts, as well as development of travel and tourism, is also
explained in appropriate manner. In addition to this, evaluation of Myla group is also done to
analyse the development and issues that impacts the change in market trends. At last, various
consequences are also discussed that fails the cited firm to respond change are also explained.
TASK 1
1.1 Analysis of issues presently making amendments in travel and tourism.
In global economies, travel and tourism sector plays a important role in generation of
revenue and providing continuously growth to the nation's economy at increasing rate by
adopting continuous changes (Evans, Stonehouse and Campbell, 2012). To cope up with the
rapid changes in travel and tourism sector there are many international firms or tour operators
which has developed strategies which are suitable for them to survive in market. They have also
made various efforts to increase their revenues by influencing tourists from different nations and
providing unique as well as quality services to attract them towards the country. In this context,
there are three major issues which are analysed causing major changes in this sector and also
affects the business operations of TUI group such as:
 Technical advancements: It is considered as main issues which has changed the ways of
travel and tourism sector to operate in current;y growing market (Kusluvan And et.al.,
2010). Rapid changes in technology has provided major opportunities for organizations
like TUI group to improve their quality of existing services and introduction of new
aspects which are suitable for the customers. The most significant example is hospitality
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industry which has innovated their services and also provided online booking facility so
that people from different nations can easily access the same. With the improvement in
technology, there are various channels have been developed like social and search
engines which has provided the facilities for people to explore different destinations and
plan holidays across the world. TUI group is a major tour operator firm which has also
adopted these changes and providing various new services and information about various
tourists destinations in UK. Further, this technological advancement has also increased
the expenditure but provided various benefits to travel tourism sector firms to sustain in
market.
 Rise in terrorist attacks: This also considered as a major issue which has caused a
problems and lowers the growth of travel and tourism sector in UK. As per the report,
rise in criminal activities and terrorist attacks in UK has created a threat between the
people and caused major reduction in number of tourist in country (Sharpley and Stone,
2010). This major issue has strongly affected the business of international tour operators
like TUI group within UK. In order to reduce the impact of this major problem there are
several security measures have been adopted by firms to provide safety to tourists and
reduced the threats. For example: As Manchester arena bombing was an Islamist attack
terror in Manchester UK. On 22 may a 2017 has sharpened laden home made bomb was
denoted as people leaving Manchester arena following a concert by the American single.
This types of major bioterrorist attacks have negative influence on condition and reduced
travel and tourism demand in UK.
 Affects of environmental conditions: The factors of environment like pollution and
climate etc. has also posed a threat for the global economy in driving issues that faced by
various travellers in countries. Rise in pollution will cause problems for travellers to stay
in country and change the perception of tourists who are supposed to arrive in the future.
Therefore, it is clear that the environmental awareness has been spread between the
travellers and also among the companies currently existing in travel and tourism sector
like TUI group. For reducing the effect of these issues the every party has their own
responsibility to make contribution in safety of environment by reducing the waste and
protecting the natural resources.
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1.2 Evaluation of present issues utilizing suitable methods and resources.
Along with the continuous growth, there are also some critical challenges have been
arisen which has caused major changes in travel and tourism sector (Cohen and et.al., 2014). In
this context, UK is also a world's largest economy that generates high revenues from this sector
and they have faced the problems which has made several changes in regulation of this sector. It
is also recognised that these changes also provide major impact on profitability of international
firms like TUI group. These major issues are described below:
 Impact of political conditions: This is considered as one of the global challenge that
causes major changes in every industry of country and business operations of firms. In
this context, rise in the political unrest between the middle east country like Saudi Arabia
etc. have been increased due to protect of civilians protests and revolts have erupted due
to which the selected entity will have to alter the policies. This will impact the
effectiveness of the operations. People's frustration with their conditions (Ladkin, 2011).
These are also considered as economically diverse regions that involves nations with a
cultural heritage, highly distinct level of per capita income and a similar set of problems.
These political restriction have made an impact on trade link and created major issues
towards growth of travel and tourism in country. Changes in legislation of political
parties has also made influence and made several changes in regulation of business
3
Illustration 1: Recent hurricane data
(Source: Hurricane/Tropical Data for Atlantic. 2017)

operations within industry. Tourism is one of the leading sources of income, crucial to
Egypt's economy. At its peak in 2010 the sector employed about 12% of Egypt's
workforce. serving approximately 14.7 million visitors Egypt, and providing revenues of
nearly $12.5 billion. as well as contributing more than 11% of GDP and 14.4% of foreign
currency revenue.
 Terrorism: It is one of the major problem which has determined that there is a huge
impact of terrorist attack on the travel and tourism sector. In this context, it has been
recognised that the issues of terrorism are also increased in some years within the
countries like tukey which has made and influence on the people of other countries and
reduced the growth of tourism within the country (Tsiotsou and Ratten, 2010). Major
influence on the profitability and revenue of international have been caused by this rise in
terrorism and also created disturbance in various services in other countries. It is one of
the major issue which has made an impact on business operations of international firms in
travel and tourism, hospitality and aviation industry etc. Moreover, it has also reduced
opportunities of growth and created a problem of unemployment in country. For
example; Various terrorist attacks in turkey has influenced its tourism sector in Middle
east countries and also influenced the perception of people in British countries. Further
turkey is also suffering from this terrorism attacks which has been analysed through
effective study and experience.
Apart from this, there is also major there are some major terrorist attacks has been place in the
countries. During the year, 2016 ISIS continued to occupy areas of Iraq and Syria and it was
considered as a major terrorism and continued to increase its operations by including more than
100 countries. Thus, these terrorist attacks has provided major impact on the travel and tourism
sector within middle east countries and wiped out around 50% of sales of companies regulating
in travel and tourism.
Political instability: In this analysis, it has recognised that the virtual regional states have seriou
problems with the governance, rule of law and finding a balance among religion and secularism.
These major issues in governance have broader impacts in terns of a cute corruption, and barriers
to effective development in travel and tourism. This political instability in middle east like Iraq
have made major influence on business operations of company's in travel and tourisms.
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 International Laws: It is also considered as one the major issue which has influence the
growth of tourism. In this, Continuous changes in legislations related to taxes rates,
custom charges has provided major impact on the growth of travel and tourism as it has
increased the expenditure of tourist to arrive in different place of country. For example:
Rise in taxes rates and custom charges will reduce the rate of tourism in Egypt and made
an negative impact on tourism within the country.
Thus are some two major issues which has provided major impact of economy and causes
various amendments in travel and tourism sector.
TASK 2
2.1 Assessment of new trends causing change in relevant sector.
There are various trends in economy that are associated with the tourism industry and its
operations within the country. These trends have their major influence on the business and the
mindset of travellers in purchasing the products. In this context, as product development
manager of TUI group it is the major responsibility to analyse these trends in order to provide
5
Illustration 2: political unrest graph
Source: (Egypt – October 2017 Update, 2017)

clear understanding to the subordinates and operate the business in appropriate manner. These
major trends are as follows:
 Decline in cost of airlines: In order to increase the tourism, the major focus of
government was on decreasing cost and achievement of efficiency in services by
developing low price airfares. It has been growing fast in UK mainly in great Britain
(Page, 2014). Expansion of Irish as well as British low cost airlines is increasing the
growth every year. In present scenario, TUI group has also achieved a growth in business
operations and rise in number of tourist due to continuous establishment low cost airfares.
 Online booking system: Implementation of modern technologies have been creating
various changes in present ways of booking for tourism services and products. Booking
through e portals and online agents have been introduced for providing easier access to
people for purchasing the tourism facilities and services in present market trend
(Hjalager, 2010). In this industry, TUI group are also approaching this trend for efficient
business and influencing target market.
 Amendments in purpose of booking: In the present scenario, the changes in the purpose
has also made an impact on purchase and arrival of people in UK. It is also recognised
that the travellers in present scenario, has been preferred an independent method for
travelling (Hartmann, 2014). With the continuous changes in present technologies, the
tourist are able to get the potential information about the destinations and also make
booking for their accommodation, food facilities by themselves etc. It has made a huge
impact on the travel packages and business of travel and tourism. Through analysis of
these trends TUI group has placed more flexible offerings and benefits in tour packages
for travellers. These current trends have been impacting the inbound as well as out bound
tourism in UK.
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2.2 Analysis of single trend utilizing suitable techniques.
From the analysis, it has been recognised that expansion of business in niche market has
large benefits in tourism. In the economy of UK, the niche market is considered as suitable in
influencing the target market segment ( Mariani and et.al., 2014). It will provide major benefits
to TUI group in attracting the potential customers of local communities to contribute towards
development through tourism.
Apart from this, UK is recognised as the major destination which has achieved major growth in
tourism sector as it has many prominent places and destinations where tourist get attracted fro m
different countries. Various sports events are also organised with UK which has been
contributing towards rise in number of travellers in country. Rise in sports events has caused
high growth in travel and tourism sector and increased the revenue of nation.
,VuelinIt has been analysed that about 37.6 million travellers have been visited in UK and made
an expenditure of around £22.5 billion which represents that there is rise volume or profitability
by 4% as compared to previous years.
In 2015, UK was categorised on 6th place in earning from international tourism as compared to
other countries which has changed to 3rd in 2016.
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Illustration 3: graphical chart
(Source : Low Cost Airline Penetration, 2017)

Inbound tourism will be a rapidly growing tourism sector with an expenditure of international
visitors estimated to achieve a growth of around 6% a year in comparison with domestic
spending by UK residents at just over 3%. The value of inbound tourism is forecast to grow from
over 21 billion in 2013 to 57 billion in 2025, with the UK considering an international tourism
balance of payments surplus in 2023, almost forty years since the UK last achieved a surplus.
TASK 3
3.1 Assessment of response of international airlines group towards change.
In the present scenario, there is strong competitive business environment within industry
regulating its business operations in European market. In travel and tourism sector, there are
many international airline groups which has provided major growth to tourism and responded to
continuous changes by developing effectively as well as suitable strategies (Lew, 2011). In
present context, As a member of strategic development team in British airways, there are various
have factors have been analysed through which company will be able to analyse and respond the
changes. PESTLE analysis helps in identifying the constraints which supports the BA to accept
the changes such as:
 Political environment: It is the most important factor that clearly describes that changes
in legislation of political parties with the country directly affects the business operations
of industries. In this, there is major impact of taxation policy on airline industry which
has impacted there business operations and reduced the profitability within the country.
For eg: rise tax rate by government will affect the prices of tickets and services
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Illustration 4: Tourism jobs and growth

(Brotherton, 2012). With this, the people with low income rate will reduce their travelling
through airways. It clearly defines the impact of political factors which affects the
profitability of British airways. Therefore, in order to respond the changes the
international airline group is using appropriate pricing and promotional strategy to sustain
in market and influence the targeted people by reducing their expenditure.
 Economic environment: There are some factors in economic environment of country
which has made an influence on growth and provided opportunities to firms like British
airways to achieve in business operations (Scott, 2011). Rise in inflationary condition has
influenced market and reduce the preference of customers towards travelling in airlines.
Through reduction of prices of its airway tickets or keep discounted price, BA will
achieve competencies to operate and achieve sustainable growth in market. Apart from
this, poor government strategies and lack of commitment from government has resulted
into poor development of various tourist spots across UK. Further, in order to respond the
growth, the international airline group has made collaboration with many countries to
increase its promotion and resolve the issues.
 Social factors : These are major factors that include major aspects like rural and urban
population, social environment, customs and traditions etc. effective research has
provided an understanding that these factors plays a crucial role in making perception
towards tourism. Rise in income level in UK is one of the major opportunity which have
positive impact on the interactional market even if the industry sees decline in growth. In
this context, in order to face the challenges effective strategies have been developed in
which the airlines has developed various reasonable schemes for lower income group to
attract them towards air travel. In order to reduce the impact of these social factors the
international airline group will also change its policies and promotional practices.
 Technological factors: Technological impact is also an important aspect which mostly
impact this sector. Through uitilization of new effectively cited firm can increase its
promotion and development of popular tourists' destination within UK. For example
company can made online website from where people can easily see the price of tickets
and can book it online. This technology help in providing better facility to customer and
it also reduces the cost of labour. Through implementation of various new technological
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services, the international airlines group will be make decisions for the improvement of
services.
 Legal factors: It is also an significant external environmental factor which provides clear
understanding about the impact of changes in legal policies and rules which are
developed by the government of the travel and tourism within the country. In this context,
legal restrictions related to safety, hygeine, insurance and fair trade regulations etc have
made major impact on business operations of company and increased major restriction to
operate in international market. In order to reduce the impact of restrictions, it will follow
all the practices and rules which are developed by government and other aviation
authority. It will ensure availability all the safety measures in their air flights to provide
safety to its customers.
 Environment factors: Rise environmental impacts in some countries have provided
major impact on the travel and tourism sector within the country. It is a well known fact
that people will always like to travel in those countries where they will get a positive
atmosphere. This rise in pollution in UK has provided major impact on tourism sector
and also made major impact on business operations of companies in aviation industry like
British airways.
3.2 creation of strategies for international group of airlines for responding change.
In order to develop new strategy, there is requirement for firms to identify its strengths
and weaknesses through market research and as well as internal analysis of firm. Further, the
company can adopt various policies which improve their capabilities and brand image in market
and lead to success. In this context, British airways needs to utilize the penetration pricing policy
in which they should reduce prices of services and tickets so that they will be able to capture the
high market share.
SWOT analysis of British airways have been done to identify its capabilities and strategic
position such as:
Strengths
 Wide presence in European countries.
 Substantial brand equity and excellent
global presence.
 Support British government makes it a
Weaknesses
 High competition of other airlines
regulating in UK.
 Rise in competition has decreased the
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