Business Environment Report: Impact on Travel and Tourism Industry

This report provides a comprehensive analysis of the business environment, specifically focusing on the travel and tourism sector. It begins by identifying and describing key macro issues impacting the industry, such as political instability, economic fluctuations, social changes, technological advancements, legal regulations, and environmental concerns. The report then delves into the micro-level impacts of these issues, using the airline industry as a case study within the broader travel and tourism sector. Examples from the hotel sub-sector are used to illustrate these impacts, such as the effects of climate change and political implications. Furthermore, the report outlines two significant challenges faced in the industry: climate change and political instability, along with potential strategies for overcoming these obstacles. The conclusion summarizes the key findings, emphasizing the importance of understanding the business environment for effective strategic decision-making within the travel and tourism sector. The report highlights the need for adaptability and proactive measures to navigate the dynamic landscape of the industry.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 5.1 ........................................................................................................................................1
1. Identification and description on key macro issues in business environment that are
significant for travel and tourism. ..............................................................................................1
2. Explanation on potential impact at micro level of any two identified issues mentioned
above with use of examples of business from hotel sub-sector. ................................................3
3. Description on two challenges faced at the time of carrying above activities. Provide
appropriate ways of overcoming it..............................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business environment means all external and internal factors that works as to influence
activities of the entities (Kew and Stredwick, 2017). It affects the company functions inclusive of
employees, customers, management, supply and demand for regulating the business activities
effectively. Tourism is growing fast and thus it impact on the economy of the country.
In addition to this, the present report will look over the things as Key macro issues in
business that significant for travel and leisure sector and potential impacts at micro level with the
use of examples from the hotel sub sector.
TASK 5.1
1. Identification and description on key macro issues in business environment that are significant
for travel and tourism.
The environment of the business gets influenced by the number of external and
uncontrollable factors and it affects the performance and strategies. In this, it can be stated that
there are various dynamic factors that need to be understand in order to find out the future if
travel industry across the globe (Akhtar and et.al., 2018). In Travel & Leisure sector, there must
one sector must be adopted as Airlines services. Under it, firm provides primarily passengers air
transport service. There are number of key issues that can impact over the travel and tourism
sector as legal, political, social, technological and natural forces. Thus, it has been defined in the
below presented manner as are-
 Political factor- The political condition and stability is one of the essential aspect in
order to determining the image of destination in terms to attract the tourist. There are
number of the factors and that must be inclusive of political unrest, travelling rules and
regulations. Furthermore, political instability can create the negative publicity and it
cause inevitable decrease in tourist arrivals (Charter and Tischner, 2017). Thus, there are
number of the strict regulation for the aviation industry and risk is associates that can
result in death or accidents. Furthermore, there were tough competition in the industry
and regulation in demand. So, passengers can push for the lower price and amenities.
 Economic factor- This also has deep influence over the airline industry. Thus, it can be
said that economic recession made the travel market to see the lowest period. In addition
to this, both economy and premium travelling is declined. The airline industry plays the
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greater role in the Travel and leisure services of the tourist. In addition to this, it can be
said that there are various airline industry that is under the pressure to cope up with the
increasing fuel prices (Kew and Stredwick, 2017). These kind of factors affects the
working of the industry in huge context. Furthermore, airline also struggled with the
enhancing labour demand on the part of the customer.
 Social factor- This values also creates major threat for the business as the consumer of
today has changed in depth manner. In order to meet the changing demands of the
consumers it is essential to bring the innovative services and to incorporate the changes
effectively. Thus, it also plays the crucial role in terms to provide effective travel and
leisure services to the customers. The preferences of the customer must be identified. In
addition to this, there must be reduction in business class travelling because that can be
huge loss for the entity.
 Technological changes- In this, the importance of technological factors can be
understood with the use of heavy technology in the global airline industry (Schaltegger
and Wagner, 2017). On the other hand, it can be said that the aviation industry is also
working as to conducts the advertising campaign on the social platform so it can be
possible to attract the customers. So, it is crucial to be tech- savvy otherwise it can results
in the loss of client. It is the responsibility of travel and leisure sector to provide effective
services to the customers. In addition to this, it can be said that enhancement in
technological advancement can make the airline firms gain more profitability and it also
enhanced services.
 Legal issues- Similar to the economical and political issues there are also some external
environment that can impact the working of airline industry. Thus, there are various laws
and legislations that are framed in terms to provide the safety and security to the
passengers. The main aim in order to make the regulation is to provide the high quality
services to the customers. Furthermore, Airline firms are responsible for the incidents as
airline crush and damage or disaster.
 Environmental- There are number of the ecological factor that can impact airline
industry in huge context. In addition to this, it can be said that Fuel is one of the huge
expenditure and it requires to invest more in the environment friendly and fuel efficient
aircraft. On the other hand, it can be stated that climate changes can also put their huge
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impact over the aviation industry as airline (Van Wormer and Besthorn, 2017). In order
to carry out all the activities effectively the whole process requires huge finance.
Furthermore, it can be said that the recent crushes and attacks have affected the
profitability and viability of the aviation insularity in the huge manner.
Hence, it can be stated that PESTLE analysis will be helpful in terms to determining the weak
areas and it affects the working of the enterprise in huge context. Thus, enhancement n cost of
doing business, strict rules and regulations and low cost airlines all are the things that can affect
the viability and profitability of the global airline industry rapidly. Thus, the airline industry was
facing major issues in terms that insufficient investment in technical advancement leads to
affects the operational function of the enterprise. The another major issues was that the poor
labour relationship can cripple the working of airline industry in both negative manner and it
mainly affects to financial and operational working.
2. Explanation on potential impact at micro level of any two identified issues mentioned above
with use of examples of business from hotel sub-sector.
There are number of the micro environment factors that can impact the working of the
airline sector in Travel and Leisure sector can impact the overall working in the huge context.
There are number of the low cost airlines operating their services on the routes similar to the
Ryanair (Wang, Peñasco and et.al., 2017). Thus, many players n the industry that is striving very
hard to minimize the cost by reduction in onboard passenger facilities. Thus, they are putting
their major consideration over short haul flight routes. In addition to this, the two issues has
been identified in the above and this is as-
1. The changes in the environmental condition impact the working of the enterprise in the
huge context. The climate change is the global issues and that most essential impact on
the air transport can be highly recognizable. This kind of changes can affect the working
of the enterprise and operations. With help use of the climate measurement tools by the
industries the things can be improvised. Thus, there are diverse range of weather related
development and that could lead to alteration in flight operations. This kind of changes
has always been the major consideration for the air travel. For example- The Ryan
Airline industry of UK taking various initiatives in terms to fix this problem with help of
the use of equipments that shows the clear temperature and can be used as Ice cleaning
tool. On the other hand, it can be said that Airline could invest in different aircraft. With
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the use of this kind of the tool it can be possible to provide effective travel and leisure
services to the customers.
2. The another issue that has been identified in Airline industry of Travel and Leisure sector
is that the changes in the political implication affects the working of the industry in huge
context. In addition to this, political changes has affected the process, patterns and
direction of the tourism development. The prices of the taxation and will be enhanced and
it affect the buying pattern the customers. In addition to this, it can be said that variation
in political condition can increase and decrease the country attractiveness for the tourism.
This kind of the factor affect the working of the industry. For example- Ryan Airline of
the UK taken the major initiatives in order to deal with political changes and they works
as to lowering the cost of their services so that they can easily travel. The operations of
Ryan impact the buying behaviour of the customer in positive aspects.
3. Description on two challenges faced at the time of carrying above activities. Provide
appropriate ways of overcoming it.
There were two major challenges that has been identifies at the time of undertaking the
operations and that is as climate and political changes. This both affects the working of the
industry in the huge context. Thus, there are number of the appropriate way that will be helpful
in order to overcome the barriers and defined in following ways as are-
 The operations of the Airline industry should be as per the tech savvy so that each things
can be conducted in effectively.
 The Airline sector should provide cost effective services that means things must be offer
in quality and affordable manner (What Is Business Environment? - Definition & Factors.
2017).
 Organisation should increase the use of new digital technologies such as tablets,
smartphones, enterprise social networks and cloud services etc. This all will be helpful in
order to carry out the effective and efficient services. Airline on poor time performance
can affect the working of the enterprise in the huge context.
 I have taken the various initiative sin order to build better relation with the customers so
that enterprise activity can be taken in the effective manner.
 In order to improve the financial and operation services the enterprise needs to frame the
better strategies so that all things can be taken in better mode.
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 I have also taken technical advancement so that airline services can be conducted in
better mode and it helps to bring quality services that leads to gain competitive
advantage.
CONCLUSION
Based on the above report it can be concluded that environment of business impacts the
working of the enterprise in huge context. This term can be termed out as both factors external as
well internal factors. The present report is base don the Travel and leisure service sector. In this,
the various things has been covered as are key macro issues of business environment and various
potential impact of micro environment of Air line sector in Travel and Leisure services.
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REFERENCES
Books and Journals
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Akhtar, P and et.al., 2018. Essential micro‐foundations for contemporary business operations:
Top management tangible competencies, relationship‐based business networks and
environmental sustainability. British Journal of Management. 29(1). pp.43-62.
Charter, M. and Tischner, U. eds., 2017. Sustainable solutions: developing products and services
for the future. Routledge.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.\
Van Wormer, K. and Besthorn, F., 2017. Human behavior and the social environment, macro
level: Groups, communities, and organizations. Oxford University Press.
Wang, P., Peñasco, C., del Río, P. and Romero-Jordán, D., 2017. We explore innovative projects
carried out by MNE subsidiaries with local partners in China, focusing on the roles played
by different components of inter-organizational trust with the local partners as well as
features of the business environment in the specific location of the subsidiary. From a
sample of 44 managers in MNE subsidiaries that we interviewed in three locations:
Beijing, Shanghai and... Journal of International Management. 23(1). pp.107-109.
ONLINE
What Is Business Environment? - Definition & Factors. 2017. [ONLINE] Available
through:<https://study.com/academy/lesson/what-is-business-environment-definition-
factors-quiz.html>.
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