Travel Tourism: Analyzing Issues, Trends, and Business Strategies

This report examines contemporary issues driving change in the travel and tourism sector, with a focus on the challenges faced by tour operators and the responses of international airline groups like IAG. It identifies factors such as increased security concerns, technological advancements, economic conditions, and environmental awareness as key drivers of change. The report analyzes how these issues impact travel packages, particularly in regions like North Africa, and discusses the strategies developed by businesses like British Airways and Vueling to adapt to these changes. These strategies include identifying customer needs, adopting competitive pricing, modifying operational activities, and investing in fuel-efficient aircraft. The report also highlights the importance of responding to political factors, legal requirements, and environmental concerns to ensure long-term sustainability and customer satisfaction. The document is available on Desklib, a platform offering a range of study tools for students.

CONTEMPORARY
ISSUES
IN
TRAVEL TOURISM

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Analyzing the issues presently driving the change in travel and tourism sector ..................3
1.2 Analyzing the different current issues using appropriate methods and resources ................5
TASK 2............................................................................................................................................5
TASK 3............................................................................................................................................5
3.1 International airline groups businesses responses to change.................................................5
3.2 Strategies developed by businesses to provide response.......................................................7
3.3 Justification for the selected strategies..................................................................................8
TASK 4............................................................................................................................................9
4.1 Impact of issue and trends that drive changes in travel and tourism sector...........................9
4.2 Consequences of the businesses failing to respond to the market change...........................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11
2

INTRODUCTION
Travel and tourism is biggest growing industry at present in UK. It further play important
role in supporting economy by creating jobs, contributing in the global GDP etc. It has been
identified that 1 in 11 job is created by travel and tourism sector. In 2014, it generated US$7.6
trillion to the world wide economy (UK tourism statistics, 2014). To boost the travel and tourism
of UK, government also takes significant step like, initiating campaign like visit Britain etc.
According to the reports of Office for National Statistics, UK is listed as eight largest foreign
tourism destination ranked by number of visitors. The international tourist helps in enhancing the
foreign exchange earnings and overall revenue of the nation. Overall, it can be stated that travel
and tourism industry serve as major economic booster. However, at present the industry is facing
many issues that will be discussed through this paper (Robson, 2013). In this report, various
aspect of travel and tourism industry will be studied in the context of provided case study. Here,
the learning will be shown regarding issues presently driving change in travel and tourism sector.
Further, analysis about the impact of issues and trends which drive change will be provided.
Thereafter, strategies will be developed on how selected entities will respond to change.
TASK 1
1.1 Analyzing the issues presently driving the change in travel and tourism sector
In the present section, learning will be shown regarding the issues which are faced by
tour operators while providing holiday packages to North African countries. There are many
tourism companies that provide tour packages to Egypt (Smith, 2014). It is leading destination of
North Africa that is famous among travelers for, Pyramids, natural beauty, attractive beaches,
deserts etc. Presently, there are many factors that are driving change in travel and tourism sector.
To sustain in the present dynamic market, it is important for organizations to consider these
factors significantly. The description of which are provided as follows:
1. Need for increased security: The safety concern among travelers is increasing
significantly after terrorism incidents at famous travel destination like, America (World
trade center attack), recent attack in Paris etc (So, 2014). It has been identified from
various news reports that terrorist are targeting travel destinations majorly. This has
further created unrest among international travelers. Therefore, customers prefer travel
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package for destinations which are safe and secured. Hence, it is important for entities to
consider emerging needs for enhanced security. The selected destination, Egypt is also
prone to terrorism risk in past therefore, tour operator must provide assurance regarding
safety and security of its customers and design the tour package only after analyzing
present political conditions of the country (Ritchie, 2011).
2. Advancement in technology: The technology is important factor that assure sales of
holiday package at present. It is important for the organizations to ensure technical up
gradations while providing services in the present competitive market (Mich and Hull,
2012). Considering this aspect, it is becoming viable for tourism entities to provide online
tour packages etc. This increases the convenience for customers as well as company.
Further, for marketing the selected destination, Egypt, virtual tour can be used. At
present, customers prefer online booking of holiday packages by making e-payment etc.
therefore, entities should ensure that security is provided against internet hackers etc
(Sundbo, 2014).
3. State of economy: The economic conditions of home country also play important role in
determining e sales of tour package. Such as fall in the disposable income of UK will
affect the purchase decisions of citizens (Kiráľová and Pavlíčeka, 2015). It is expected
that individuals will resist taking international tour packages to save money. Likewise,
increase in unemployment level will also reduce demand of holiday packages etc further;
increase in VAT in Egypt will make traveling to the cited destination costly.
4. Increased environmental awareness: There is significant rise in environment concern
among public. The operations of travel organization have direct impact on surroundings
(Reisinger, 2013). Such as it is alleged that tourism activities are major contributor in
increasing marine, air and noise pollution. Therefore, many conservative groups boycott
and restrict services offered by tourism entities. Therefore, it is important for tour
operators to consider emerging needs related to environment while providing its services.
1.2 Analyzing the different current issues using appropriate methods and resources
From the provided case scenario, it is clear that tourism destination falling within Middle
East and North Africa can be affected. There are wide ranges of issues that are likely to affect
travel packages which will be offered for Egypt by the tourism company. The significance of
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understanding these issues is that it can impact sales of tour packages and also cause
dissatisfaction among buyers (Becker, 2013). Hence, it is viable for entities to analyze these
issues with the help of proper methods and resources. Further, it has been identified that major
issues that can affect the tourism of these countries are classified broadly on the basis of factors
like, political, economy and environment etc. It has been ascertained that, political unrest,
terrorism are the major issues that are likely to impact tourism of selected country. The Egypt is
highly prone to terror attacks due to Islamic extremism etc (Hall, Timothy and Duval, 2012).
Along with this many of travel destinations of North Africa like, Tunisia are suffered from
bombing etc. Further, many of the victims of these attacks were tourist. Such as, thirty, British
tourist were killed in resort by a jihad terrorist. Due to this factor many of the tourism
organization are canceling their tour packages to Tunisia until the situation is controlled. Further,
customers are also threatened and not ready to take tour packages to North African nations. The
visit of international tourist to cited countries is reducing gradually (Murphy, 2013). Therefore, it
is important for the organizations to consider these factors while providing travel package to
individuals. In addition to this aspect, another issue faced by entity is related to severe weather
conditions. It can be stated that North Africa have extreme climate and considered as the hot
continent (Boniface, Cooper and Cooper, 2016).
TASK 2
PPT
TASK 3
3.1 International airline groups businesses responses to change
The travel and tourism sector have boosted business of International Airlines groups. It is
British-Spain multinational airline holding company which is headquartered in London. It
provides good quality air transport facilities to worldwide customers. International Airline Group
is regarded as among top six Airlines Company of the world (Leder, Torresi, 2013). As per the
calculation of profits in year 2010, it is among the third largest airline company in Europe by the
revenue. Therefore, to maintain the leading position, it is important for International Airline
Groups to make effective response to changing needs and preference of customers. This will help
the organization in increasing satisfaction and brand loyalty among customers. Further, company
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can stay ahead of its rivals by responding to market changes on the proper time. Considering this
aspect, there is high demand among customers of prime quality services at low cost (Xiang,
Magnini and Fesenmaier, 2015). Therefore, IAG Company has identified various measures to
reduce operational cost by using improved techniques and processes. In addition to this aspect,
organization adopts competitive pricing policy where prices are set after considering the strategy
adopted by rivals. Furthermore, International Airline Group also emphasize on modifying its
operational activities aligning with prevailing trends in industry. Such as with the increasing use
of internet, company is started doing online marketing more as compared to advertisement in
newspapers, television etc (Evans, Stonehouse and Campbell, 2012). Further, considering the
growing health consciousness among customers, diet food, chocolates and drinks are offered to
the customers. Since, the majority of clients of company comprises of international customers
therefore organization is focusing on their needs too. Such as, UK individuals are taking more
trips to Asian countries. Considering this, entity has increased number of flights on Asian routes.
Also, low cost carriers are introduced considering the demand of affordable services (Hannam,
Butler and Paris, 2014).
Further, changes in political factors also play factor stimulating entity to modify its
operations. Such as with the increasing risk of terrorism, government is stimulating air travel
companies to increase the security criteria. Therefore, IAG assure proper authenticity check of
customer before booking its ticket. In addition to this aspect, company also respond to anti-
terrorism activities (Lyons and et.al., 2012). Such as 30 Britons were killed in massacre in
Tunisia therefore, company cancelled all its flights to Tunisia and other North African countries.
Similarly, technical changes also possess strong influence on operations of IAG Company. In
this respect, organization is modernizing its fleet size to integrate more fuel efficient aircraft.
Further, company respond with environmental changes so as to sustain in the long run. Such as,
it has invested into purchase of low carbon and noise generating engine to safeguard
environment from further pollution (Smith, 2014). In addition to this aspect, legal factors are also
considered significantly important while operating. Therefore, IAG ensures that it follows all the
rules and regulation laid down by UK government. It strictly follows competition act, health and
safety act etc. to meet needs of regulatory authorities. On the basis of it, company has modified
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its operations where more focus is given on maintaining healthy competition with rivals,
providing hygienic surroundings to customers and employees etc (Sharpley and Telfer, 2014).
3.2 Strategies developed by businesses to provide response
Since, its inception that to survive in present dynamic environment it is important for
organization to respond to changes. For this aspect, various strategies are developed by
International Airline group business like British Airways and Vueling etc. The common strategy
used by both the entities is identification of needs of customers and providing them with services
accordingly (Park, 2014). The new products and services are developed by considering the
needs, preference and taste of customers. These companies also tie up with travel organization
like, Expedia, Thomas Cook, and Thompson as well as provide budget services to their clients. It
is important approach that helps in enhancing customer base as well as market share. Further, in
the context of British Airways, it has been identified that it has adopted price changing strategy
to respond in a better way with the changing needs of market (Pesonen, 2013). Such as, company
can change its prices as per the prevailing economic trends, like with increase in disposable
income, GDP of country etc entity increase its price to improve its margin. While, in case of
increase in inflation, unemployment level, fall in disposable income, business tends to reduce the
prices.
On the other side, Vueling emphasize on modifying services as per the changing needs of
customers. At present, individuals prefer low cost airline services which are having good quality.
Considering this aspect, budget services are offered to the customers by entity. With the increase
in number of corporate clients, company has changed its focus from leisure travellers from
business one (Murphy, 2013). For this aspect, it has also launched new product named Duo
which involve in-flight beverage and refreshment, a vacant middle seat and preferential
boarding. The company’s main aim is to increase its market share and connectivity for travellers.
With this aspect, in 2013 Vueling has increased its network to expand to 100 destinations from
Barcelona-El Prat Airport. To assure the success of new strategy of expansion, company is
focusing on intense marketing which showcase its people along with new transparent and
negotiable price structure designed for business travellers. Further, company also make changes
in its marketing mix components as per the needs of market (Bramwell and Lane, 2008). Such as
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to inform the corporate customers about new offers, advertisement are given through
newspapers, business magazines, direct mail etc. Further, it is important for the company to
increase its brand awareness by making effective use of promotional channels. Therefore,
integrated marketing, social media, PR are some promotional strategies that can be considered by
the organizations.
3.3 Justification for the selected strategies
From the critical analysis of aforementioned strategies, it can be stated that they are
causing positive impact on business of Vueling and British Airways. These strategies are viable
for the company as they help in meeting its corporate objectives and goals. It has been stated that
identified strategy are employed by these organization into their business to bring revolution and
amend services for gaining better possibilities in the global market. The new strategies are likely
to yield benefit to not only clients and organization but also to society as whole. The increased
business of airline organization with the aid of new strategies will help in supporting economy as
the entities will be able to provide more tax. The British Airways use price changing strategy,
which will help business in maintaining its revenue even when the economic conditions are not
favourable. Further, Veiling strategy of growth by launching new flights to 100 destinations will
help in increasing tourism of Barcelona (Strategy of Vueling, 2012). This is because it will
increase convenience for travellers and induce them to take holiday package to the cited city.
Thereafter, strategy of company to design flight package according to preference of customers
will enhance satisfaction level of buyers and will help business in meeting their expectations. In
addition to this aspect, by providing tailor made flight package, organizations will be able to earn
more profits. Further, the use of promotional strategies will help entities in increasing brand
recognition and thus facilitate in attracting maximum number of customers (Smith, 2014).
TASK 4
4.1 Impact of issue and trends that drive changes in travel and tourism sector
From the provided case scenario, it has been identified that, Myla travel is an autonomous
travel company specialized in luxury services with around 10 offices in UK. The prosperity of
business is fascinating giant travel agency to expand in this market segment. Therefore, the
executives of Myla travel have received invitation to join Travel network groups. However, one
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of the executives are not consenting to join with Thomas Cook as it may lead to reduction of
workforce and modification of business practices (Xiang, Magnini and Fesenmaier, 2015). As
per the reports, it has been identified that Thomas Cook is planning to cut down up to 2500 jobs
in the UK and dismiss 195 high street travel agents. This will lead to increase in unemployment
level of the country. The major issues that will be faced by Myla travel agency by integrating
with big travel agency are described as follows:
Euro crisis: It has been identified that crisis of Euro currency has severe impact on
revenue of travel agency. The Euro crisis relates to situation where government fails to pay off
its debts. It may further lead to global recession and cause negative impact on the worldwide
economy. It is important for travel organization to consider such issues while operating. It is
feasible for them to provide affordable packages (Evans, Stonehouse and Campbell, 2012) The
Euro crisis will have direct impact on business of Thomas Cook and Myla agency as it will
reduce purchasing capacity of individual on travel and other leisure activities.
High fuel cost: The increase in fuel prices have direct impact on operations of the
company. It further makes travel services costly and force entities to charge high prices from
customers. Therefore, high fuel cost will make the services of Thomas Cook costly and lead to
reduction in overall demand (Hannam, Butler and Paris, 2014).
Therefore, it is important for Myla travel agency to make wise decision regarding
integration and focus on various issues prevailing within the sector. Other than this, to assure
growth irrespective of these issues, company can focus on sustainable development. For this
aspect, various strategies like, niche marketing, increasing promotion etc can be used.
4.2 Consequences of the businesses failing to respond to the market change
From the aforementioned discussion, it has been identified there are issues like Euro
crisis, high fuel prices are prevailing within industry. In the case where, company fails to respond
to the market change will lead to drastic impact on business of travel and tourism organization.
The major consequences that will be faced by Thomas Cook and Myla travel agency are
described below:
 High operating loss: The failure of company to respond on changing market scenario
will lead to high operating cost and may give rise to situation demanding closure of
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business. For example, with the increase in prices of fuel, it is important for the
organization to increase the prices of its services so as survive in the market and cover
operational cost and earn appropriate profit (Contemporary issues in tourism, 2015).
 Reduction in demand: If company fails to make changes as per the emerging trends and
needs and preference of customers, it will lead to reduction in demand. In case of issue
like Euro crisis, the capacity of individuals to purchase luxurious travel packages will be
reduced. Therefore, it is important for the company to offer budget travel package in such
situation (Smith, 2014).
 Negative publicity: If company does not respond to the market changes than it will not
be able to fulfil expectations of customers. This will lead to negative image of the
company in market. Such as present trend is to offer services through online portal so as
to increase the convenience of customers. The failure to provide services through internet
may impact business in a negative way (Robson, 2013).
CONCLUSION
Summing up the entire report, it has been concluded that travel and tourism industry is
highest growing sector at present. It is important for the organization serving in this industry to
consider the contemporary issues to survive in long run. At present, there are many factors which
are driving change in the industry therefore, they must be focused significantly. Further,
political, legal, environment and economic factors lead to changes in industry and have direct
impact on the operations of travel and tourism entities.
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