Travel and Tourism Sector Report: Historical Developments in London

This report provides an overview of the travel and tourism sector, with a specific focus on the industry in London. It begins with an introduction to the significance of tourism and its global impact, followed by an examination of key historical developments since World War II, including the impact of socio-economic changes, technological advancements, and product development. The report then details the structure of the travel and tourism sector, outlining the components from attractions to tourism development. Further, it explores the role of government, government-sponsored bodies, and international agencies, along with the influence of economic policies. The report also addresses factors affecting tourism demand and how supply has changed to meet these demands, particularly in London. Finally, it evaluates the economic, environmental, and social impacts of tourism, offering strategies to mitigate negative effects and maximize positive outcomes, concluding with a summary of the findings.

TRAVEL AND TOURISM SECTOR

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Key historical developments in the travel and tourism sector..........................................1
1.2 Structure of the travel and tourism sector.........................................................................3
TASK 2......................................................................................................................................5
2.1 Function of government, government sponsored bodies and international agencies in
travel and tourism...................................................................................................................5
2.2 Local and national economic policy influences on the travel and tourism sector............5
2.3 The implications of political change on the travel and tourism sector in different
countries.................................................................................................................................6
TASK 3......................................................................................................................................7
3.1- Explain factors affecting tourism demand......................................................................7
3.2 How supply has changed to meet the effects of demand in LONDON............................7
TASK 4......................................................................................................................................8
4.1 Evaluate the main positive and negative economic, environmental and social impacts of
tourism....................................................................................................................................8
4.2 Explain strategies that can be used to minimise the negative impacts while maximising
the positive impacts..............................................................................................................10
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................12

INTRODUCTION
Tourism is considered as the main industry throughout the world. It has been indicated
by The World Travel and Tourism Council (2001) that more than 10 percent of universal
economic output are created by tourism. Also, tourism is seen as global phenomenon with
inexplicably immense infrastructure. Its significance is evident from the reality that its effect
thoroughly penetrates politics, society, culture and the economy as well. Tourism begins with
the images of an esteemed visits to seaside spas, resorts and grand tours plus business
enterprise activities.
Here, the paper is describing travel and tourism industry history and structure along
with its influence on government, international agencies and economic policy. Moreover, the
demand and supply effects on travel and tourism industry is discussed in the following
content. At the end positive and negative impacts of tourism is being summarized. The
overall attempt in the present research is made to explore tourism sector of LONDON
because it is the most popular destination of tourist around the globe. The country is
attracting 30 million of visitors from other nations every year. Here, people travel from all
corner of the world to admire several impressive monuments of London, explore city’s rich
vibrant culture and take in a theatrical presentation in the West End. Additionally, around 26
million of overnight visits are made every year in the London and these visits are mainly
made by tourists resides in other parts of LONDON.
TASK 1
1.1 Key historical developments in the travel and tourism sector
The below is past and currents developments in the LONDON travel and tourism sector:
Post-war developments–Since the end of Second World War in the year 1945, the global
travel and tourism sector had improved so much that it is taken as biggest or dominant sector
around the globe. In the last 40 years the particular industry developments has been shaped in
range of factors. Such aspects are divided into four categories (Ashley, 2000). These are:
 Modifying socio-economic situations;
 Product development
 Developing technology
 Changing needs of buyers
Modifying socio economic situations–This term is given to combination of both economic
and social factors. Such aspects are add to the travel and tourism sector growth from the
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Second World War. The time for leisure activities has been greatly increased in past several
years for the LONDON people. Now people in this nation take it very easy to enjoy holiday
without any fear of short for money while they return to home. These paid holidays have
enhanced demand for seaside hotels and resorts (Bramwelland Lane, 2000).
The right of four to five weeks of paid holidays has supported domestic tourism sector
of LONDON by inspiring customers to take short breaks in addition to main holiday. Also,
the overall length of working week has been largely reduced. The average week of working
in the period of 1950’s was 50 hours in LONDON. The typical week of working in the
country range from 37-40 hours. Various workers are now have good choice about their
working week pattern. The increased number of retired individuals and unemployed in
present times has seen for demanding leisure activities (Cooper, 2005). It has been an
important factor in the development of organizations, such as SAGA that is specialize in
selling holiday packages for people of above 50.
Disposable income – It is money that remain with the individuals after the payment of
necessities like household bills and mortgage. This remaining amount is said to be disposable
income. During the buoyant condition of economy, individuals are confident enough to spend
on travelling. It has significant economic influence on the sector of travel and tourism, as
result in fluctuations in the total amount people wish to spend on visiting different
destinations. But the disposable income can fall and rise in the periods of economic recession
and decline. The last recession of LONDON in 1990’s saw the decreased demand for
overseas holidays. It was due to the fear of unemployment. Moreover, rates of exchange have
always been an essential part in the patterns of taking holiday. Any increase in the pound
value and decline in the currency of overseas would encourage outbound tourism
(Goeldnerand Ritchie, 2006).
Developing technology – Transports has greatly improved in the past several years. Trains,
ships and aircraft, etc. can carry many passengers quickly as well as safely to different
destinations. Technological advances in the design of aircraft after the Second World War
meant that airline became available as a mass transport since the period of 1970. Also, the
rise in ownership of car has been the highest feature of single transport that has promoted
enhanced demand for local tourists. A range of technological improvements in the
transportation system have influences the travel and tourism industry development from
1950’s to these days (Gyr, 2010). There are various way to travel, which all have come a long
way from the period they were invented. Additionally, there is up-to-date travel like
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Hovercraft and Euro tunnel that are quite cheap to do travelling. Moreover, package holidays
have become cheaper and popular, which will definitely increase the demand for travel. Also,
due to technical advancements travel is easier plus comfortable now and it doesn’t take up
more time that again adds to overall demand (Kreag, 2001).
Product development–Always there are some developments of new products in the sector of
travel and tourism for meeting demands of customers. This is mainly due to the ability of
industry in introducing travel services and products for inbound, outbound and domestic
tourists.
1.2 Structure of the travel and tourism sector
The travel and tourism industry structure includes six components. These are first
tourist attraction, which is a location tourist’s visit, for instance Alton Towers or Blackpool
beach. Secondly, an adequate transportation is required to arrive at specific destination,
which can be car or train, etc. Third, accommodation should be available for all visits
extending more than one day, like guest houses, caravans and hotels (KYRIAKIDIS and
et.al., 2009). Then tour operators include such components into a package meeting
requirements of customers and then finally refer to the travelling agent or can sold to
customers directly. These travel agents sell holidays through brochures by earning a small
commission for their services. At last, tourism and development situated everywhere, which
ensure that visitors learn something by visiting any destination as well as they make extensive
advertisement and promotion of tourism. The following is the travel and tourism structure of
LONDON:
Attractions – These are either man made or natural in themselves. It is simple to think of
natural attractions like Blackpool Beach or Lake District that has around six millions of
visitors every year. Manmade attractions are specifically created for tourists. Alton Towers is
constructed for families and is a well-known theme park. Several other renowned attractions
of LONDON are Eden Project Legoland Windsor, Tower of London and London Eye
(McCabe, Minnaertand Diekmann, 2011).
Transport – At least 25% of tourist’s expenses are incurred in this. With several manners of
getting around it creates main role in the sector of tourism. For the reason to reach to their
destination, it generally comprises two types of transport (Middleton and et.al.,2009). These
are:
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 Rail network: It has been modernized extensively with various private organizations
competing with one another, i.e. GNER, Eurostar and Virgin. Over five million of
passengers every year travel with Eurostar by the channel tune. The journey by train
has reduced somewhat, however few services are compensating their way. Moreover,
coach travel every time has been a popular and essential type of transport enabling
individuals to travel at less cost comprising abroad. Eurolines and National Express
carry 12 million and more passengers in a year to around 1200 destinations (Novelli,
2005).
 Air travel – It include flights flying to strict schedules. Also, this include planes with
charter flights hired for some journeys at no preliminary set time. Around 75 percent of
all package holidays use travelling by air.
Accommodation–It is generally very significant to the sector of travel and tourism. It includes
campsites, travel inns, self-catering visits and caravans. Recently self-catering where one can
supply their own meals and food has rapidly grown. Half-board provides tea and breakfast
while full-board offers everything required by the customers (O'Mahonyand McMurray,
2008).
Tour operators–They develops holidays in the kind of package. A contract is negotiated with
transport and accommodation providers. The bulk purchases lessens costs of overhead and
holiday is presented to travel agents as a brochure. Then it is sold either through agent or
directly. The tour operators are of four types. First, the mass market include First Choice,
Thomson and Thomas Cook. They provides holiday packages to mountains and lakes. Next is
special holidays that is especially design for holiday maker’s special interest, like 18-30 club.
Third is domestic holidays that includes Health Spas, Butlins. Last is holidays for foreigners
visiting the nation and are provided with guides to get knowledge about LONDON culture
and history (Penrose, 2011).
Travel agents – These perform their job of brochures selling. The agents are the link in
between public and tour operators. Generally, they cater for specialist holidays. There are
various travelling agents with their agencies situated throughout the London. The most
famous travelling agents are Lunn Poly, Thomson and Going Places. Furthermore,
independent travel agents are family owned and small too. The most common one is call
centres where clients can make booking on phone for their liked holiday packages (Pettinger,
2015).
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Tourism development–Tourist boards provide information relations to region involved to
potential tourists. Individuals can pop into information centre of tourist for getting literature
or other things also related to the area. The information board of tourist is concerned with any
type of promotion, like for information, advice and to conduct research. For instance, Blue
Badge Guides provide specific and intensive training to tourists for visiting their respective
regions (Reisingerand Turner, 2003).
TASK 2
2.1 Function of government, government sponsored bodies and international agencies in
travel and tourism
Government engages in a significant role in the sector of tourism, as it is the main body
to imply law, economic policy and nation’s security. The government involvement is in two
manners, i.e. indirect and direct. The government core functions in the LONDON’s tourism
industry are to promote the sector, raise international revenues, develop leisure environment
for the industry, create business stability as well as build up secure atmosphere for both local
people and tourists. Primarily, government takes key obligation for the infrastructure growth,
in which it considers the development of LONDON tourism basic necessity. By creating and
promoting its attractions to the tourists around the globe, the government provides good job
opportunities to local people and as a consequence promotes their lifestyles. The regulations
of government are very essential in safeguarding tourists plus improving their experience by
creating secure and nice environment for them (Simm, 2015).
Government sponsored bodies like regional tourist board, national tourist board, Visit
Britain and many more are especially for undertaking researches regarding tourism
development by distinct aspects for its promotion and forming new trends. These sponsored
bodies can provide accurate and precise information in relation to LONDON’s attractions and
destinations to both international tourists and local visitors. Also, international agencies
involved in travel and tourism sector development. UNWTO (United Nations World Tourism
Organization) founded in the year 1974 and headquarter in Madrid is the core international
organization, which collects statistical data related to international tourism. The information
given by UNWTO are very beneficial in analysing tourism flow, trend and growth
(Spenceley, 2012).
Besides above, the IATA (International Air Transport Association) was introduced in
1945 as a voluntary association with 80 percent of members from the global airlines sector.
The core function of this association is to promote regular, economic and safe air transport.
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Also, some other international associations that take participation in the sector of tourism are
WTTC (World Travel and Tourism Council), ABTA (Association of British Travel Agents),
etc (Weaverand Oppermann, 2000).
2.2 Local and national economic policy influences on the travel and tourism sector
The system of setting government budget plus interest rates plus national ownership
and labour market where government has interventions is referred to economic policy. Such
economic policies are part of tourism industry success, as it create impacts on economic
growth of country that consequently influences developments on the particular region’s
amenities, facilities, lifestyle and economy (Agnew and et.al.,2006).
Many nations has suffered from the economic breakdown and in LONDON also GDP
was declined by 9.8 percent in 2009. But by modifying local economic policies, the
decreasing number of visitors were controlled by government of LONDON. One main
economic aspect is exchange rate of pound that is quite strong in comparison to several other
foreign currency, in which foreigners can expend more amount (Bastakis, Buhalis and Butler,
2004). Besides this, an issue that is required to be discussed in this relation is seasonality,
since for this sectors holidays are very busiest period. Many of the economic policies
concentrates on the sustainability of tourism development. An important element of this
sustainability is economic viability. A significant role is played by government in the tourism
sector success after knowing its significance. This sector is also influenced by positive
modifications in the economic policies. The travel and tourism sector perform their activities
through a series of governmental bodies and departments so that they can have complete
potential of visitors economy (Berrittella and et.al.,2006).
2.3 The implications of political change on the travel and tourism sector in different countries
Tourism and travel sector greatly depends on nation’s political changes. Nobody will
wish to visit a place with political instability, as such place would not able to provide secure
and safe environment to spend holidays by tourists. There are many nations that are just avoid
by tourists due to the reason of political situation although they have potential attractions or
destinations that can be offered to tourists. One important example of this type of region is
Burma, which is in the Junta General Than Shwe military monopoly. It is a developing nation
of Asia. This particular region with temperate climate has good social and geographical
features as well as can provide distinct destinations types. But the tension between nations
like LONDON and USA and military government, there is no proper development in the
Burma’s economic plus tourism sector (Blake, Sinclair and Sugiyarto, 2003).
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In a different manner, at times the political alterations can lead to good outcomes into
nation’s international tourism. For instance, during the period of election in LONDON, the
currency value has decreased due to economic recession. But it offer a good opportunity for
other countries people to visit London, as it would be cheaper for them in comparison to
other time (Bohdanowicz, 2005).
TASK 3
3.1- Explain factors affecting tourism demand
In Economics, demand refers to the quantity of a product or service which is desired by
consumers. Demand of tourism refers to the number of travellers using the tourism services
and the development of the industry is also dependent on the demand for a destination.
Factors affecting tourism demand range from demographics concerning with the change in
age structure, the rising educational levels and the effects of migration; Economic factors
related to exchange rates, job loss; technological development affecting the information
sharing, and transportation; political factors of EU policy, taxation regulations; environmental
factors like terrorism, epidemics, earth quakes and other natural calamities as well as threats
(Budeanu, 2005).
The changing demographic variables like lifestyle changes and age group structure
changes have impact on tourism demand. There is increasing demand for flight trips and
more uses of tour operators to design whole package holidays. Higher spending power leads
to longer stay and luxury service choice. Further the kids’ tour are increasing in demand
(Burns, 2004). There are some of the drivers of change of the change in the demand of the
business in TUI group which is change in consumer’s behaviour, lifestyle, and customer’s
priority. However, the demographic shifts, changes in the work pattern of the group,
changing modes of consumption by the customers will have a heavy impact on the tourism
business of TUI group.
The major Economic factors affecting the tourism are the concept of exchange rates. As
now-a-days tourists are very much interested in relative prices of consumption items like
accommodation, shopping grocery items while visiting different places. The concept of
value-for-money has a significant impact on holiday spending of travellers for example they
might be interested in comparing prices of a particular product like a bottle of bear with their
home country prices and it affect the tourism outflow from expensive countries like France
and Britain to budget locations like Greece and India for holidays (Choi and Sirakaya, 2006).
7

The more use of internet and technological advancements have vital impact on the way
a decision for a certain tourism product is made which have a great impact on demand for
that particular destination / product as well. As the changing technology and consumer
behaviour has increased the pre-visit extensive search for information for that particular
destination. Now the holiday decision are the final result of comprehensive search evaluation
process in which vast amount of information available on internet plays the crucial role.
Therefore, promotional expenditure might play a significant role in determining the tourism
demand (Deery, Jagoand Fredline, 2012).
3.2 How supply has changed to meet the effects of demand in LONDON
There are two conditions call for the priority of action. Either demand exceed supply or
supply exceed demand. Strategies are required to be adopted for tailoring to encounter
circumstances arising on seasonal, weekly, long term or daily basis. A range of strategy used
by LONDON when demand is low either for certain periods or below capacity. For
strengthening distribution channel, the country make diversification and product modification
by identifying even new or alternative demand sources as well as adopt price discounting
tactics. Moreover, LONDON also does reappraisal of promotional strategy. For instance, all
such strategies are applied by Caribbean destinations for effectively responding to less
occupancy level throughout the period of summer. VFR is promoted for residents as
generally holidays fall in the period of summer (Goodwin and Francis, 2003).
One more condition is necessity to lessen costs, as it is not possible to enhance
anticipated demand factor. For instance, to lessen variable and fixed costs in the sector of
hotel, it might be not only needed to reduce availability of rooms but entire wings or even
hotel as a whole. This is again prevalent in the Caribbean destinations. Moreover, airlines can
lessen availability of plane quota or rent it to other organizations (Haley, Snaithand Miller,
2005). It is required to be assured that the suppliers of TUI group are making continual
sustainability improvement with the changing demand of the tourism business. The company
help other hotels of the group by giving training of co-efficiencies, which results in giving
higher value to the money of customers. The main aim is to increase the influence on
sustainability to all suppliers.
Besides above, redistribution becomes essential as product demand is no longer self-
sustaining. For hotels, the converting aspects might include two rooms fusing into one or
non-smoking rooms related provision. Conventional rooms of hotel are being converted into
time-share units, which is also an example of strategy adopted for long period. Also, for the
8

airline sector, the scheduled flights conversion into charter itineries are part of adaptive
supply redistribution. At times demand exceeds capacity, extra charges incurs for the
resources by increasing prices for rooms or seating to gain additional revenue per unit
(Hamiltonand Tol, 2007). Additionally, theme parks with ever growing business but negative
impaction can recourse themselves to high entry charges significantly. Then to give response
to more level of demand, current capacity factor can be expanded by destination
management. Again, the Caribbean can be referred as an example for the demand
transference at the period of excess to the low demand times. Distinct seasonal pricing is an
effort of redistributing demand by following from high demand at winter to low in summer
season (Liseand Tol, 2002).
TASK 4
4.1 Evaluate the main positive and negative economic, environmental and social impacts of
tourism
Generally, there are major three different types of impacts of Tourism
on the places of LONDON where tourists visit (Cooper et al, 1993). In
nature these are economic, environmental and social. Even though there
are many negative impacts, on the other hand such impacts are beneficial
too on LONDON.
Economic Impact: While considering the economic impacts, it is essential
to recognize the positive as well as negative effects which are explained
in brief.
The positive are as follows:
 It generates foreign exchange in LONDON.
 It creates more opportunities in the fields of employment and new
different jobs in tourism sector.
 It encourages small business sector and entrepreneurship.
 It increases regional development generally in remote areas.
 Increase in tax revenues (Miller, 2003).
The negative are as follows:
 Economic factors increases opportunity costs.
 With the increase in tourism sector, there will be over dependency of
earnings through tourism sector.
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 In tourism sector, there are always seasonal issues which have to be
faced by the people in LONDON
 Problems over foreign capital investment are one of the major issues
(Novelli, Schmitz and Spencer, 2006).
Environmental Impact: This is not important that tourism increases the
positive impacts but meanwhile there are also negative impacts in
LONDON.
The positive impacts are as follows:
 It protects selected natural environment.
 It prevents further ecological decline in LONDON
 .It promotes preservation and regular repairing of historical
monuments and buildings in LONDON.
 It helps in improvement in different areas where the visitors visits.
The negative impacts are:
 More people lead to pollution in air, water, etc.
 For developing tourism in LONDON, people are destroying agricultural
land
 Water and land shortages
 It disrupts wildlife breeding cycles(Liseand Tol, 2002).
Social Impact: Tourism increases lifestyle of people in LONDON whereas
there are many negative impacts also on the society of LONDON which
are explained as follows.
The positive impacts are:
 It helps in improvement in quality of life.
 It facilitates meeting visitors.
 It helps in positive changes towards values and customs in the
society of LONDON.
 Tourism promotes cultural exchanges in LONDON.
 It decreases the social differences among society in LONDON(Goodwin
and Francis, 2003).
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The negative impacts are as follows:
 It increases drinking habits, alcoholic and gambling habits in people
of LONDON.
 Tourism and entertainment of visitors increases excess consumption
of drugs.
 Tourism often leads to unwanted changes in the lifestyle of people in
LONDON.
 Tourism sometimes results in negative changes in values and
customs.
4.2 Explain strategies that can be used to minimise the negative impacts while maximising
the positive impacts
The strategies which shall be followed to increase positive economic impact and decrease
negative economic impact are explained in brief:
 Dealing with Multinational Tourism Companies can increase positive impacts.
 To increase positive impact government of LONDON should encourage local tourism
firms through supporting local production community.
 Government should improve quality of cheaper hotels and food and clothing outlets.
 There should be increase in number of cultural events and services in LONDON.
 Government should upgrade retail markets in LONDON.
 Promoting links between local and international suppliers (Blake, Sinclair and
Sugiyarto, 2003).
The positive environment impacts on tourism can be increased and negative impact can be
decreased through the following tactics:
 The local tour operator should efficiently handle water, waste and energy.
 Government of LONDON should promote reliable environmental certification
authority and its link to policies and practices are required.
 Proper authority and committee should work towards to increase number of visitors in
LONDON.
 Sustainable tourism indicators are required to increase positive impact (Goodwin and
Francis, 2003).
In order to increase positive social whereas to decrease negative social impact, following
strategies to be followed:
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 There should be more cultural programmes on every occasion so that tradition does
not get fed.
 There should be proper establishment of destination management and marketing firms
with the focus on improving society.
 Professional development tools may be used for development in small and medium
size organisation which results in gaining faith of local people in LONDON.
 There should be specialised network, tools for distance education and web based
portals which can increase the communication between people wishes to visit
LONDON all around the world (Liseand Tol, 2002).
The above all the points help company to increase the positive impact and decrease the
negative impact by implementing the above strategies.
CONCLUSION
It can be concluded from above report that tourism is a most rapidly growing sector in
both developed and developing nations. The travel and tourism sector is also considered as a
means of creating new job opportunities and lessening unemployment level in various
regions. The tourism sector history is one of clumpy expansion, massive growth periods
interrupted by stagnation and recession periods. Moreover, international tourism and travel is
backbone of internationalization as well as develops the world in several manners, such as it
enhances trade, promotes economic development, create more disposable income and
advances development. Furthermore, communities are strengthen through the international
tourism by bringing together individuals from diverse backgrounds plus regions and
promotes the goals of global understanding and peace. Such benefits hold a base for
emerging, industrialized and developing nations plus give a main platform on which other
sectors can be developed.
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