Evaluating the Impact of Inflation on Tourism: Hays Travel Analysis

This report explores the impact of inflation on the tourism industry, using Hays Travel as a case study. It begins by defining inflation and its effects on consumer buying power, then examines the positive and negative impacts of inflation on Hays Travel, including increased revenue potential versus decreased customer affordability. The report also suggests strategies for Hays Travel to mitigate the adverse effects of inflation, such as minimizing consumption, controlling production costs, and increasing labor supply and productivity. The research methodology utilizes a positivism philosophy and deductive approach, aiming to provide objective analysis and effective solutions. The conclusion highlights that while inflation presents challenges, strategic planning and adaptive measures can enable tourism companies to navigate these economic pressures successfully. Desklib provides access to similar solved assignments and resources for students.

Foundation year
research project

Table of Contents
Introduction.................................................................................................................................................3
Background of the topic..........................................................................................................................3
Research Aim:.........................................................................................................................................3
Research Objectives:...............................................................................................................................3
Research Questions:................................................................................................................................3
Literature Review........................................................................................................................................4
Concept of inflation in context of tourism industry.................................................................................4
Impact of inflation on Hays Travel in terms of positive and negative manner.........................................4
Solutions in order to deal with adverse impacts caused by inflation in regard of Hays Travel
Organization............................................................................................................................................5
Research methodology................................................................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7

Introduction
Background of the topic
Inflation is all about increase in the price of products which further might affect the
overall purchasing capacity of potential customers in significant manner. It basically demonstrate
the rate by which buying power of customers drop down due to increase in the price of particular
products during a particular period of time. In other words, inflation can affect the growth and
progress of an organization in both positive and negative manner as well. During high inflation,
the buying capacity of individuals get minimized as they are not able to buy necessary products.
Further, it also affects the overall growth and enlargement of economy profoundly. Moreover,
industries and companies are also likely to get affected with the constant increasing rate of
inflation (Akbulaev and Aliyev, 2020). The present report is based on Hays Travel which is a
well-known tourism planner company based on UK. Here, they offer tour facilities to people for
different locations like Turkey, Portugal, Greece, USA and so on. The present project report aims
to examine impact of inflation on tourism industry and preparing suitable strategies to develop
suitable solutions to get rid of adverse impact caused by inflation.
Research Aim:
“To evaluate how inflation is affecting tourism industry of UK and develop suitable solutions to
deal with such adverse impacts”. A study on Hays Travel Organization.
Research Objectives:
 To understand the concept of inflation in context of tourism industry.
 To evaluate impact of inflation on Hays Travel in terms of positive and negative manner.
 To formulate appropriate solutions in order to deal with adverse impacts caused by
inflation in regard of Hays Hotel.
Research Questions:
 What is the concept of inflation in context of tourism industry?
 What is the impact of inflation on Hays Travel in terms of positive and negative manner?
 What are the appropriate solutions in order to deal with adverse impacts caused by
inflation in regard of Hays Hotel?

Literature Review
Concept of inflation in context of tourism industry
According to Naidu, (2017), it is analyzed that inflation is related to increment in the
overall price of different products and services which makes it difficult for buyers to fulfill their
basic requirements. Inflation also directly influences overall buying capacity of individuals.
When prices increases, most of the people are likely to avoid to buy the products. In addition to
this, inflation can also be understood as change in the overall value of wholesale price index
annually. Here, imbalance between demand and supply is considered as one of the major
effective reasons of inflation that critical reduces down the overall buying power of individuals.
At the time of inflation, people are likely to buy fewer quantity of each & every commodity
comparison of previous years. Sometimes, it becomes complex for individuals to even meet with
their daily requirements when inflation increases. Therefore, people are likely to search for more
options so that they can increase their level of income in order to fulfill their basic needs &
requirements significantly (Lee, Chen and Peng, 2021). Also, it becomes essential for
government authorities to keep control on ever-increasing inflation to maintain smooth progress
of economy. It is analyzed that upto 2 and 3 % inflation is justified for economy as well but more
rate of inflation can create issues in terms of affecting buying capacity of customers and
hampering the daily operations of the entities. At the time of COVID-19 pandemic, inflation was
at hike which further leads towards increment in the overall hotel, airlines prices and more.
Impact of inflation on Hays Travel in terms of positive and negative manner
According to Tan, (2017), inflation has ample of positive as well as negative impacts on
tourism industry. In terms of negative impact, high inflation caused increase in the price of
services of tourism companies that makes it complex for people to avail such tour packages. . It
basically demonstrates the rate by which buying power of customers drop down due to increase
in the price of particular products during a particular period of time. In addition to this, it also
caused issues for economic development and growth. During inflation, there is imbalance
between demand and supply which further create uncertainties for business organizations as they
are unable to structure suitable strategies to control the inflation (Venugopalan and Kumar,
2017). Further, inflation also creates unfavorable environment for customers as they cannot buy
the products or avail services easily. In case of selected travel company, inflation lead them

towards great uncertainties which will create complexities in terms of structuring suitable
strategies. In addition to this, inflation will also affect their overall operations and daily functions
in profound manner. On other hand, there are also positive impacts of inflation in terms of
increasing the revenue and sales of the company. Inflation creates opportunity for the respective
travel company in terms of charging higher prices from buyers. This will significantly help the
entity to earn higher amount of revenue in profound manner.
Solutions in order to deal with adverse impacts caused by inflation in regard of Hays Travel
Organization
According to Cannonier and Burke, (2017), it is monitored that inflation creates ample of
issues for the tourism companies. However, it is possible for such companies to deal with
adverse impacts by adopting appropriate solutions in an effective manner. In this regard, Hays
Travel organization is required to prepare suitable strategies by analyzing the business
environment significantly. In addition to this, they are required to minimize the consumption
level that will further prove helpful in terms of dealing with adverse impact of inflation present
within the environment. Here, it is also possible to control the inflation by minimizing energy,
trade and cost of procurement (Amarasinghe and Silva, 2019). During the inflation, there is also
requirement to control the production cost. These all practices are useful in terms of controlling
the adverse impact of inflation in profound manner. In reference of respective entity, there is also
requirement to increase overall labor supply, productivity and personal saving to keep control
over inflation in profound manner.
Research methodology
Research methodology is considered as one of the most imperative part of the overall
project work (Kumar, 2018). In context of research philosophy, there is selection of positivism
philosophy as it is based on analyzing the information in objective manner by using numerical
tools & techniques. Further, deductive research approach is follow in context of current project.
In terms of data collection, appropriate methodology has been followed so that necessary amount
of data can be collected in an efficient manner. Here, following suitable methodology will help
in accomplishing pre-defined project aims & objectives effectively.

Conclusion
After analyzing the above-mentioned information, it is analyzed that inflation can affect
the growth and progress of an organization in both positive and negative manner as well. During
high inflation, the buying capacity of individuals get minimized as they are not able to buy
necessary products. Further, it also affects the overall growth and enlargement of economy
profoundly. Moreover, industries and companies are also likely to get affected with the constant
increasing rate of inflation. Additionally, inflation is related to increment in the overall price of
different products and services which makes it difficult for buyers to fulfill their basic
requirements. Inflation also directly influences overall buying capacity of individuals. At the
time of inflation, people are likely to buy fewer quantity of each & every commodity comparison
of previous years. Sometimes, it becomes complex for individuals to even meet with their daily
requirements when inflation increases. Therefore, people are likely to search for more options so
that they can increase their level of income in order to fulfill their basic needs & requirements
significantly. Furthermore, inflation has ample of positive as well as negative impacts on tourism
industry. In terms of negative impact, high inflation caused increase in the price of services of
tourism companies that makes it complex for people to avail such tour packages. On other hand,
there are also positive impacts of inflation in terms of increasing the revenue and sales of the
company. Here, it is also possible to control the inflation by minimizing energy, trade and cost of
procurement. During the inflation, there is also requirement to control the production cost. It is
monitored that selected business entity can easily deal with increasing inflation by having
suitable strategies and plans. Having appropriate solutions make it easy to deal with adverse
impact of inflation over operations and functions of entity and further make the entity enable to
attain tremendous amount of success profoundly.

References
Books and journals
Akbulaev, N. and Aliyev, V., 2020. The effect of coronavirus sars-cov-2 in the tourism industry
in Africa. Journal of Environmental Management & Tourism, 11(8), pp.1938-1947.
Amarasinghe, H.K. and Silva, D.S., 2019. An investigation of tourism investment on
accommodation sector of tourism industry of Sri Lanka. In Sustainable Tourism
Development (pp. 265-292). Apple Academic Press.
Cannonier, C. and Burke, M.G., 2017. Tourism and financial development in small states:
Evidence from Caribbean countries. Tourism Economics, 23(6), pp.1369-1377.
Kumar, R., 2018. Research methodology: A step-by-step guide for beginners. Sage.
Lee, C.C., Chen, M.P. and Peng, Y.T., 2021. Tourism development and happiness: International
evidence. Tourism Economics, 27(5), pp.1101-1136.
Naidu, S., 2017. Exploring the dynamic effects of urbanization and real effective exchange rate
on tourism output of singapore. Tourism analysis, 22(2), pp.185-200.
Tan, Y., 2017. Hotel-specific, industry-specific and macroeconomic determinants of profitability
in London Hotel industry: Structure-Conduct-Performance or Efficient-Structure
hypothesis?. Available at SSRN 2943487.
Venugopalan, T. and Kumar, D., 2017. Sustainable development through sustainable tourism in
India-A case study of Kerala tourism. Asian Journal of Research in Business Economics
and Management, 7(12), pp.10-27.