Introduction
Key operations
and markets
Makes availability of travel packages
along with the accommodation, food and
travel facilities to the customers world
wide. The customers avail all the
facilities including the booking of the
tickets online along with the hotel rooms
and so on.
Conclusion
From the above findings it has been concluded that high inflation rate tends to increase the prices of goods and services which result
in lowering the affordability of customers. By considering current scenario the situation of pandemic has badly effected the rate of
inflation due to increase in the demand of products which also increase the prices of goods and services including each sector of the
economy. It hamper the customer purchasing power or to avail the services. In the above report causes like demand-pull effect, cost-
push effect, increase supply of money and policies formed by government are clearly explained. There are various strategies by
which inflation rate can be controlled by the government. Minimize expenditure on unnecessary things, control the prices and
increase the savings are some strategies which are explained in the above project.
Inflation management strategies
deployed
Company background and overview
The Virgin Holidays Limited founded in 1985 the travel brand, headquartered in
Crawley, England. It also located in seven other places in Canada and the United
States. They provide luxury and boutique hotels in all over the world. They also has
wide network of retail concessions. They also invest their revenue to develop the
sustainable energy sources. They built goodwill for dedication to customer service
and entrepreneurship by their magic touches. From last 5 years they are getting best
ratings from their customers and win the award of British Travel. The main purpose
of this project is to analyse the inflation impact on the organisation like tourism and
various strategies to overcome this situation.
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p.100054.
Matikiti-Manyevere, R. and Rambe, P., 2022. The Impact of COVID 19 on the Tourism Industry: The Role of Fourth Industrial Revolution Technologies in Mitigating the
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Information Systems in the Service Sector (IJISSS), 14(1), pp.1-18.
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Impacts of inflations on
company’s operations and
performance
The tourism industry includes in the hospitality industries
in which tourism is facilitated completely and offer
services, infrastructure and products which make travelling
possible for various purpose. It involves different industries
like hospitality, travel companies and tourist destinations.
In other words it can be defined as all the activities of
business which provides goods and services directly to the
customers to facilitate the pleasure, leisure and business
activities. It is one of the fastest growing industry in all
over the world. It depends on seasonal operations so they
faces many ups and downs.
Inflationary period: The time period in which prices of goods and services rise and cost of living is
also increased. It result in decrease in purchasing power of the customer. At this time customer's first
priority is to satisfy their needs rather than their wants. Inflation rate can be measured on the basis of
month and year by taking twelve months average. During inflation customer not preferred purchasing,
as they need to give high prices for the same product which has low price in past. Customers like to
buy quality products at reasonable price so they will not like to buy it during inflation period. When
rate of inflation is low, it lowers the prices of products as well, which tends to increase the buying
power of the customer's.
Causes of inflation: Inflation is caused by various factors like demand-pull, cost-push and devaluation etc.
Demand-pull inflation: When demand is higher than economy's ability to fulfil those demand it refers to
demand-pull inflation. When people has more they demand more which result in enhancement of prices of
the goods and services. During holidays, Virgin Holidays increase the prises of their services due to high
demand.
Cost-push inflation: When prices of raw material increase it tends to increase the prices of final product.
In other words, cost involve in inputs is high, it will result in increase in prices of finished goods. Labour
of the organisation may ask for high wages which increase the expenses of the organisation. The company
Virgin holidays increase the prices of their services with the increase in the prices of cost of production.
Increase supply of money: It refers to the increase in the amount of money circulation in the economy.
When supply of money is more than the rate of production, it result in enhancement of inflation rate. Bank
of nation have control on the money circulation. As customer like to spend more and producer do not have
enough stock to meet the demand than they will increase the prices of products. Virgin holidays increase
the prices of their services as customer has more money and able to spend more.
Policies formed by government: There are some policies that result in demand-pull or cost-pull inflation.
When tax subsidies issued by government for some products, it enhance demand. If demand is more than
supply than cost could rise. The new policies formed by government can impose high tariffs that increase
the expenses of Virgin Holiday to produce goods and import them outside the country.
In the tourism and travel sector, the rate of tickets enhanced due to increase in
the rate of inflation in the country. This results in decrease in the affording
power of travellers and they are unable to spent on higher rate so they usually
avoid travelling during inflation. Customers want best products and services at
less price so they like to purchase it only when prices is low. In organisation at
some point of time the prices tends to be low as per the affordability of
customer. But when they lowers the prices their profit margin reduces which
may result in lowering the salaries of the employees. Salary is type of
motivation for employees as they do well they will get best pays on their
performance, but if organisation reduce their salary without considering their
performance this create inefficiency in overall business. This disappoints the
employees and lowers their performance as they are not getting true salary why
they work truly. Employees are the most important assets of every organisation,
as all the other assets depreciate with the time, people are only assets that
appreciate with the time, increase their performance day by day. So decrease in
their salaries result in decrease in overall performance of the organisation. It
also lowers the performance of the people as they don't like to perform well in
low salary. Due to this employees resign from the firm and it will lowers the
overall companies performance. When termination is high than, employee
retention is also become difficult. Other don't want to join the company due to
high turnover or lower salary. The company like Virgin Holidays also make best
strategies to deal with the situation of increase in rate of inflation. It includes
high cost and time as all the plans and policies are again evaluated and changed
according to situation arises in the dynamic business environment. Current rate
of inflation in United Kingdom is 9.9% in 2022 which is very high in contrast
to other countries. This will impacted very badly to every sector of the society,
especially tourism and travel sector. High inflation rate lowers the profit margin
of the company which reduce the revenue and causes the situation of
termination and discouragement.
The main cause of inflation in UK is low supply and high demand. By
enhancing the supply of the products and decrease the earning for some
period of time to control the situation of high demand. There are various
methods that can be used to deal with the high inflationary situation. One
of the mostly used method is monetary policies. This method is used by the
banks to have control on the credit volume by enhancing the rates, reserve
ratio and sell some securities to the public in open market and concentrate
on the profit generation and margin requirements. When non-development
activities are less priorities inflation can be balanced and fulfil the
requirement of government expenditure by collecting taxes. To mange the
rate of inflation the savings of the people should be considered. Deferred
payment system is one of the best strategy to save the money in present
and pay after some pre decided period of time. This is the most effective
way to deal with higher inflation rates. In this situation government of
United Kingdom should raise money by introducing loans which charge
high rate of interest result in enhancing the gross domestic product and
balance the situation of inflation. They can also introduce some schemes
like lotteries, money prize etc. which include almost 30% tax on the
winning amount. This increase the revenue of government and can
contribute to control inflation. The major strategy is to have control on the
prices to minimize the inflation and enhance the control, which can
increase the saving of people more than their expenses. This help them to
purchase necessary products which are needed urgently rather than the
want of the customers. Prices of all the commodities should be fixed by
government and seller cannot increase or decrease the prices, if one do so
they will have to pay certain amount of fine or can be sued by government.
Inflationary periods and main causes

Report on Inflation's Impact on Tourism: Virgin Holidays Case