Tourism Industry and Inflation: Strategies for Overcoming Challenges

This essay critically analyzes the impact of inflation on a tourism organization, using a case study approach. It examines how British Airways, a major player in the tourism industry, has been affected by inflation, particularly wage inflation, rising material costs, and increasing fuel costs. The essay delves into the macroeconomic and microeconomic causes of inflation, such as increased demand during the pandemic, political pressures affecting supply chains, and pricing strategies in a competitive market. It highlights the operational and performance challenges faced by British Airways due to inflation, including reduced passenger numbers and revenue losses. The essay also explores strategies employed to manage inflation, such as controlling prices, reducing unnecessary expenses, and increasing savings. Ultimately, the essay concludes that the COVID-19 pandemic exacerbated inflation, impacting the tourism industry and necessitating strategic measures to mitigate its effects. Desklib offers similar resources for students seeking assistance with their assignments.

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

Introduction
Tourism industry is one of the largest and most growing industry all
over the world which is consists many complex industries such as travel
companies, tourist destinations and many others (Khan, Khan, and
Shafiq 2021). There are many challenges and issues that is faced by
industry due to the time of pandemic of COVID-19. The industry is
basically relying at the seasonal operations. The poster's main objective
is to critically analyse the influence of inflation on the organisation
which is based on tourism and it is also provides the ways which is
helps to overcome from the challenges.
Key operations and markets
Conclusion
From the above study of research, it has been concluded that the
pandemic of COVID-19 creates many issues and challenges for every
company or organisations. The situation of inflation is directly affected
the number of customers. It is reducing the customers power as the
rising product and services price. It has been analysis that the COVID-
19 highly impact on the business and operations of British airways
where they faced rising charges of flight tickets, workforce etc. it is also
affecting the inflation as it is resulted on the consumers because they are
avoided the product and services facilities during the pandemic. There
have been some more causes due to inflation such as it is increased the
cost-push inflation, demand-pull inflation, rising wages, regulations and
policies and many more. There are some strategies which is use by the
company in order to manage situation of inflation such as controlling
price, unnecessary expenses, minimising rising saving and many others.
Inflation management
strategies deployed
Inflation situation is caused by the values of land because the
industry of tourism demand for extra lands. The impact of
inflation is throughout all over the world and each and every
business. It has been analysing that the monetary policy is
considering the strategy which can be helps in control and
manage the impact of inflation within the nation (Steiger and
Scott 2020). Controlling quantity and credit quantity the
central bank of the nation is adopted some strategies such as
increasing the reserve ratio, selling security within open
market, inflation risk bank rates, selective credit control and
many more. These all quantity were also be manged by the
government if they take interests for reducing the non-
productive expenses and ineffective expenses. This situation
of inflation is very challenging for every company or
organisation the private expenses concentrate on the
government demand which is for the product and services.
The strategies help to supplemented through the taxation.
People can manage the inflation by rising of the saving of
their money. They will also minimise the disposal income
with people and also should consumptions of individual
expenses. Rising cost of livings, there are many peoples who
minimise their personal expenses also. These strategies help
to increase the saving and managing the inflation across the
nation. It is also help to manage the inflation effectively and
the process easier.
Company background and overview
British airways are known as the flag carrier airline of United
Kingdom. It is the second largest company of United Kingdom. It was
founded by the British government in 1974. it is the first passenger
airline which is generate more than US$1 billion on the single air
route within a year. It is headquartered in London, England (Kroeber
2020). It is also offering many tourism services at the large number
such as package holidays, resort, cruise lines and many more. It is also
known as the global airline which is offering low fares to their
passengers.
References
• Khan, A., Khan, N. and Shafiq, M., 2021. The Economic Impact of COVID-19 from a Global Perspective. Contemporary Economics, 15(1), pp.64-76.
• Kroeber, A.R., 2020. China's Economy: What Everyone Needs to Know®. Oxford University Press.
• Strauss, S., 2020. Some emerging hypotheses on the economic opportunities and challenges of the post-pandemic world. Available at SSRN 3633391.
• Florido-Benítez, L., 2021. The effects of COVID-19 on Andalusian tourism and aviation sector. Tourism Review.
• Stride, M., and et.al., 2021. The effects of COVID-19 pandemic on the UK construction industry and the process of future-proofing business. Construction Innovation.
• Hosseini, K., Stefaniec, A. and Hosseini, S.P., 2021. World Heritage Sites in developing countries: Assessing impacts and handling complexities toward sustainable tourism. Journal of
Destination Marketing & Management, 20, p.100616.
• Steiger, R. and Scott, D., 2020. Ski tourism in a warmer world: Increased adaptation and regional economic impacts in Austria. Tourism Management, 77, p.104032.
• Fennell, D.A. and Cooper, C., 2020. Sustainable tourism: Principles, contexts and practices. Channel View Publications.
As per the study, it has been analysed that British airway has faced wage inflationary in the last past
years (Strauss 2020). They are faced that there are many employees that has been demands for the high
salary, increasing the prices and cost of the materials, increasing the fuel cost and many more. British
airways are the largest and fastest growing company which is provides its customers many advantages.
As it is maintaining the probability level the company increases the services prices and tickets fares in
order to rising of the cost. The term of inflation is the situation which is impacted as the large number
of factors such as at the macroeconomic level and microeconomic level. There are many effects and
impacts which are related to the micro and macro levels. There are various levels which is helps the
economy to be well as ability to exist.
Macroeconomics causes of the inflation
 During the pandemic situation the demands for services are high as compared to normal days.
 This situation is created many rules and regulation for the people safety (Florido-Benítez 2021).
Government takes decisions to closed everything and announce lockdown due to this the production
capacities led as well as the supply chain.
 There are some pressures of political system which is also known as the global tension. As there are
many restrictions and sanction result in the supply chain.
Microeconomics causes of inflation:
 Rises of prices could also the microeconomic scarcity because as the business goes with the
production which is increasing the demand as well it might not to include any extra cost because in
case demand reduces then the supply chain is to artificially increases the prices and margins (Stride
and et.al., 2021).
 There is the tough competition in the market because of shortage talent as it is hiring the cost of
talent for running the organisations which is helps to increase the prices.
 There are many companies who are increased their prices of product and services which is
constraints the supply chain as well the microeconomic development, prices change in order to
inessential which is caused by inflation.
 If the supply chain and any other determinants having no influence directly on the organisation then
it is still observing the prices which is decide to increase and boosting with it the aim of the profit
margins.
Inflationary periods and main
causes
Impacts of inflations on company’s
operations and performance
The term of inflation situation, there are many airlines which don’t travel
and also avoiding to interacting with tourism organisations. Because of
inflation situation, prices and cost of travelling and holiday packages of
services rises. Therefore, passengers and travellers were ignoring the
travelling because they are price sensitive (Hosseini, Stefaniec, and
Hosseini 2021). The impact of inflation on British airways is reduce the
operation and performance of the company. they are providing the
services of travelling at low price to their passengers. As British airways
is one of the highest fares travellers so due to inflation there are many
passengers which are shifted their travelling agencies to other. The
company tries to and make efforts to minimise their price for the
passengers of travelling as possible they can minimise the fares but due to
inflation, they lost many passengers. The pandemic situation of COVID-
19 is the situation which impacting all overall the operation and
performance of the company where the company faced many challenges
and issue to overcoming from the situation. This typical situation rises
many challenges for the company which is also impacting on their
revenue and British airways faces large amount of loss.
Key operations and markets
 The British airways are offering many benefits to their passengers as they
consist to provide the holidays packages with some extra benefits such as
quality destinations and sharing it in the market accordingly. They provide the
services according to the passenger’s budget and there needs and wants.
 The British airways targeted the market as per the budget and location and
offering the holidays packages according to it which is helps them to attract
more passengers towards the services of the company.
 The key function of the company is to provide their customers the famous
destinations services such as Canaries, Malta, Greece, USA and many more
(Fennell and Cooper 2020).
 The company is determining the large number of travelling facilities to their
passengers where the passengers can travel as solo or with their family.