Impact of Inflation on the Tour and Travel Sector: A Detailed Analysis

This report analyzes the significant impact of inflation on the tour and travel sector, focusing on the causes, impacts, and potential management strategies. The report uses Marriott Hotel as a case study, examining its operations, market presence, and the effects of inflation on its performance. It identifies key causes of inflation, such as high demand, low supply, and economic downturns, and their effects on the tourism industry. The analysis covers both positive and negative impacts of inflation, including increased wages, higher tax rates, and reduced consumer spending. The report also discusses the effects of the COVID-19 pandemic on the sector. The conclusion emphasizes the importance of understanding and managing inflation to mitigate its negative effects on business growth and customer demand.

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INTRODUCTION
The report aims to analyse the impacts and cause of
inflation on tour and travel sector. Inflation is being
the most serious causes in the economy. It is the
situation in which an economy faces high prices of
goods and services and daily useful commodities.
When inflation occurs it directly impacts on the
business functioning of the organisation. There is
requirement of key potential in order to formulate
better strategic plans and policies to face the
recession and boost economic condition (Kim, Kim,
and Woo, 2021).
Key operations and markets
Conclusion
The report has concluded that inflation is the biggest cause
of the business economic downturn. It affected the
business growth as it reduces the buying power of
customers and create unbalance demand and supply. Also.
The report has identified the causes and impact of inflation
which is pandemic.
Inflation management
strategies deployed
The major impact of inflation is on
economic growth because tourism
industries contributes towards GDP of
the nation. If there is less growth in the
tourism sectors, then it will directly have
effect on economic growth. Because
there will be rise in factors of production
and for this companies will require high
funds. Inflation also reduce the
investments in tourism sector because
due to inflation investors do not invest
their money because of high taxes and
loss of failures. This restricts the growth
of the tourism industries and leads less
number of players in the industry.
Company background and overview
Marriott hotel is a group of largest chain of hotel groups
which was founded in 1927. The company serves its
operation in overall world in order to achieve great profits
and brand name. Marriott hotel comes under the
multinational company which is operated in 131 countries.
They provide various kinds of services and products
across their hotel group which make their operations
diversified. These will include all the hospitality services
like accommodations stays, in house food and drinks, car
rental facilities, luxurious services like resorts, tree houses,
roof top facilities, part and wedding hauls (Schmude, Karl,
and Weber, 2020).
The company is scattered in large areas which include
different interiors and luxurious collection of Marriott
restaurant, bars and resorts. Also, they provide in house
dance clubs, seminars and conferences. This shows that,
the hotel chain has huge collection of products and
services to offer different class of customers. They work
on the current trends like online and offline booking, E-
check in, check out and payments through e-mobile.
References
Kim, H., Kim, Y.G. and Woo, E., 2021.
Examining the impacts of touristification
on quality of life (QOL): The application
of the bottom-up spillover theory. The
Service Industries Journal, 41(11-12),
pp.787-802.
Schmude, J., Karl, M. and Weber, F.,
2020. Tourism and Terrorism: Economic
impact of terrorist attacks on the tourism
industry. The example of the destination
of Paris. Zeitschrift für
Wirtschaftsgeographie, 64(2), pp.88-102.
Streimikiene, D. and Korneeva, E., 2020.
Economic impacts of innovations in
tourism marketing. Terra Economicus,
18(3), pp.182-193.
Matteucci, X., Nawijn, J. and von
Zumbusch, J., 2021. A new materialist
governance paradigm for tourism
destinations. Journal of Sustainable
Tourism, 30(1), pp.169-184.
Inflationary periods and main causes
Inflation is constantly rising in the economy and thus it is
impacting on the tourism and travel company. There are multiple
causes of inflation which is affecting the economy like high
demand and low supply, economic downturn and recession
period in which the resources are become scares and limited
(Streimikiene, and Korneeva, 2020). This shows that, the
company has experienced rise in prices of their services to cover
its cost of resources like man and materials. The Marriott and
different operations with the name of JW Marriott, Ritz-Carlton,
and St. Regis. In 2022, the hotel has shown rise in rates of their
products and services by 30% which has affected the power
buying power of the customers. As compare to 2019, the figure
has gone raise due to economic conditions of the economy which
has advanced power to incorporate in the growth and
opportunities. The rise in demand and prices also has another
factor which is Covid-19 pandemic. Due to which, it is beneficial
for the company to hold the position in the large market through
giving concession of prices. The pandemic has causes major
losses to the hotel Marriott in terms of employment
opportunities, investors and stakeholders interest and it would
relate to the organisational abilities (Matteucci, Nawijn, and von
Zumbusch, J2021). The Marriott has lost all the abilities which
has reduced their potential to run the market with the brand
name. also, Covid-19 was the highest economic downturn which
has closed the operations of the business in tourism industry. The
highest cause of inflation which is faced by Marriott hotel is all
about the necessary stage in the economic life cycle. This shows
that, there is cause of in higher the prices and lower down the
customer arrival. Before the time of pandemic, the hotel got
reservations and bookings in a vast range but due to less buying
power and high rates of hotels leads to shorten the customer
interest.
Impacts of inflations on company’s operations
and performance
Positive impact-
High inflation affects the demand in tourism sector. As inflation
rises cost of living of the people also rise of the people who have higher
income level and it is beneficial for the tourism industries. It increases
the wages rate to be higher. Increase in prices of goods and services is
correlated with the wages rates. Good market leads the growth of the
wages because companies fairly pay good to their existing employees to
retain talented people. High tax rates will bring more capital in the nation
which will be beneficial for GDP. Because high rates lead the prices of
the services and good high and generate more revenue for companies.
and Inflation boost the investment and spending of the consumers on
commodities or services. Tourism industries can generate higher profits
by providing services at higher prices. Because the cost of fixed and
variable factors also rise when the prices increase (Bojanic, and Warnick,
2020). Negative impact-
Inflation is the significant factor which affects the tourism industry in
developing countries. It affects the internal factors like prices and
external factors like economic trends in the industry. The retailers of the
tourist industry will raise the prices of their services. That will directly
reduce the demand of the consumers. Inflation will lead the high tax rates
on the products and services and this will automatically affect the
consumers power related to attaining the services.