Hays Travel Case Study: Inflation Impact and Strategic Responses

This case study examines how Hays Travel, a prominent independent travel company, addressed the challenges posed by inflation. It identifies wage inflation and increased production costs as key issues affecting the company's operations and profitability. The study highlights strategic responses such as repositioning the brand and adjusting pricing models. The analysis concludes that inflation significantly impacts industries by influencing supply, demand, and consumer behavior, particularly affecting travel decisions due to increased prices. Students can find similar case studies and solved assignments on Desklib.

A tourism company that has been affected by inflation
in the past and how they overcome this challenge

Introduction
Inflation is the major concern for the business
which impacts when it comes to cash flow and
purchasing power. the inflation puts the
pressure on the business which leads to
decline in the profitability. As inflation is rate
of increase in price of goods or services in the
economy with decline in purchasing power for
specific time period.
Conclusion
From above it can be concluded that, numerous
industries will be impacted by inflation, which
actually puts an impact on the entire economy.
During an inflationary period, supply will decline
and demand for goods and services will rise. People
avoid travelling when there is inflation because all
goods and services have higher prices.
Inflation management
strategies deployed
•Reposition the Brand: Depending
on the situation, most products are
either under-priced or overpriced
relative to the value that the company
provides. The managers have the
chance to realign the company's
product positioning by taking
advantage of the inflation wave.
•Exchange the price model- The
success of the subscription and "my-
product-as-a-service" models has
intrigued many organisations, and they
have already considered adopting the
new pricing strategy.
Company background and
overview
In the present research, chosen organisation is
Hays travel which is an independent travel
agent chain headquarter in Sunderland,
England. In the UK, company has largest
number of retail travel shops. It was founded
in 1980 by John Hays which deals in the
products of Charter and scheduled passenger
airlines, package holidays, cruise lines, hotels
& resorts.
References
• Apergis, E. and Apergis, N., 2021. Inflation expectations, volatility and Covid-19: evidence
from the US inflation swap rates. Applied Economics Letters, 28(15), pp.1327-1331.
• Ashoorioon, A., Rostami, A. and Firouzjaee, J.T., 2021. Examining the end of inflation with
primordial black hole mass distribution and gravitational waves. Physical Review D, 103(12).
p123512.
The inflation results due to increase in production cost or increase in demand of products and services. In the past years it is been
analysed that hays travel is facing the wage inflation in which employees has started demanding of high wages, that leads to increase
in cost of the companies.
This indicates that there are different levels at which the general economy's capacity to produce goods and services (macroeconomics),
as well as industry-specific or internal organisational motivations (microeconomics), play a significant role in price developments.
Inflationary periods and main causes Impacts of inflations on company’s
operations and performance
Understanding the factors that can have an impact on
a company's bottom line is crucial if the organisation
wants to succeed. As a result, one of the major factors
affecting the company's overall performance is
inflation. Inflation has affected the Hays travel
company's business operations in a variety of ways,
some of which are listed below:
• Increased consumer price index
• Increase interest rate
• Hard to invest
The inflation results due to increase in production
cost or increase in demand of products and
services. In the past years it is been analysed that
hays travel is facing the wage inflation in which
employees has started demanding of high wages,
that leads to increase in cost of the companies.
This indicates that there are different levels at
which the general economy's capacity to produce
goods and services (macroeconomics), as well as
industry-specific or internal organisational
motivations (microeconomics), play a significant
role in price developments.