Comprehensive Report: Travel and Tourism Sector Analysis and Impacts

This report provides a comprehensive analysis of the travel and tourism sector. It begins with an introduction to the sector, defining tourism and its historical development from ancient times to the modern era, including key milestones like the invention of the wheel, the development of roads, and the rise of travel agencies and holiday camps. The report then explores the structure of the travel and tourism sector, detailing the roles of tour operators, regulatory bodies, public organizations, tour agencies, and accommodation providers. It further examines the functions of government, government-sponsored bodies, and international agencies such as the WTO and WTTC, and their influence on the sector. The report also analyzes the impact of local and national economic policies on the success of travel and tourism, distinguishing between direct and indirect impacts, sponsorships, and service integration. Additionally, it covers factors affecting tourism demand and supply changes. Finally, the report discusses the economic, environmental, and social impacts of tourism, both positive and negative, and proposes strategies for minimizing negative impacts while maximizing positive ones. The report concludes with a summary of the key findings and a list of references.

Travel and Tourism Sector

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Historical development in travel and tourism sector.............................................................1
1.2 Structure of travel and tourism..............................................................................................2
TASK 2............................................................................................................................................3
2.1 Analysing the function of government, government sponsored bodies and international
agencies in travel and tourism.....................................................................................................3
2.2 Influence of local and national economic policy on the success of travel and tourism sector
.....................................................................................................................................................5
2.3 Implications of political change on the travel and tourism in different countries................6
TASK 3............................................................................................................................................7
3.1 Factors affecting the demand of tourism...............................................................................7
3.2 Way in which supply has changed to meet the affects of demand........................................8
TASK 4............................................................................................................................................9
4.1 Main positive and negative economic, environmental and social impact of tourism...........9
4.2 Strategies that can be used in minimising the negative impacts while maximising the
positive impacts.........................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Travel and tourism can be defines as the activities of people travelling to other places
outside their usual environment. Tourism is the one of the largest and profitable industries in the
world. In other words, tourism involves all the activities which are directly or indirectly related
to operate the tour (Perch-Nielsen, Sesartic and Stucki, 2010). This sector has a vast history and
has helped organizations to grow. Present report covers the history and structure of travel and
tourism sector. Further, it covers the influence of local, national governments and international
agencies on the travel and tourism sector. Moreover, it covers the effects of supply and demand
on the travel and tourism sector. Lastly, it also includes environmental, economic and social
impact of tourism.
TASK 1
1.1 Historical development in travel and tourism sector
It was in the year 32000-10000 BC when people started to travel and this travel was in
search of food shelter and water. They unknowingly travelled different parts by foot and stayed
long at places where they could get food, water and shelter. In the year 3500 BC wheel was
invented because of which people could travel different places easily. In 3000 BC people started
using horses and boats for travelling (Evans, Stonehouse and Campbell, 2012). It was in the year
2000 BC when Europe developed paved roads which were helpful for people to reach their
destination easily and without getting lost. Within 753 BC- 145 BC, huge networks of roads
were developed in which most of the roads lead to Rome.
It was in 18th century when actual revolution took place for tourism. It was the French revolution
which spread ideas around the world and in Europe regarding tourism. The first restaurants were
introduced which boosted up the travel and tourism sector (Dickinson and Lumsdon, 2010). In
addition to this, it was in the year 1698 when steam engine was invented by Thomas Savery but
it was in the year 1769 when James Watt actually used it as a tool for travel. Resorts and spa
were developed in Europe. Moreover, electricity was developed by Thomas Alva Edison. All
these inventions were very helpful for the travel and tourism industry to grow. Further, these
inventions were helpful for the people to live comfortable life and to visit different places easily.
In 19th century Thomas Cook founded the first travel agency and it also became the first tour
operator. He started in London and made travel easy for the people who wanted to see different
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places. In 1936, Billy Butlin was the first person to make holiday camps (Ghimire, 2013). This
became the most important aspect of British culture. Following are the changes which took place
in 19th century:
Year Key developments
1936 Billy Butlin introduced Holiday camp.
1938 For these holiday camps, Pay Act was introduced.
1959 First passenger service by Jet Airline.
1969 Tourism Act was introduced.
1981 60% of households in UK started using car.
1989 Private ownership for cars reached 20 million
1992 Package holidays by EU Directive.
1998 30 million were the number of holidays abroad.
1998 Travel tickets were purchased by 1.4 million on internet.
2003 Both British Tourist Authority and English Tourism Council merged and became
Visit Britain (Tourism today, 2014).
1.2 Structure of travel and tourism
In travel and tourism there are many elements involved which are very essential for
travellers. In order to meet the needs, requirement and in framing the industrial policies and
framework of the travellers these type of structure is very important. Further, in developing
leisure for the travellers and visitors within the country, there are many integrated services in
travel and tourism (Scott and Lemieux, 2010). In travel and tourism there are many services
which are involved are very important for the growth. Following are the services which are
involved in the structure:
Tour distributors and operators: There are many distributors and tour operators like Thomas
Cook who are helpful for the travellers in visiting the different places easily. These operators
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design tourism packages which involves all the important spots which a traveller should visit. In
addition to this, in these packages they include all the facilities which will be required for
reaching, accommodation, food, etc. Further, they develop large, small scale tour and also
provide all information which is essential in tourism at any part of the world (Peeters and
Dubois, 2010). Distributors indulge with people for direct or indirect selling. In addition to this,
internet, travelling agencies, etc. are also included in this.
Regulatory bodies: Regulatory bodies are very important and helpful in developing policies and
procedures for travel and tourism. In developing effective means of working, these types of firms
are set up to oversee the norms of industry. In addition to this, within these types of firms, these
bodies are helpful in laying rules and regulations which are helpful in monitoring and controlling
all the activities in the business.
Public organizations: In industry, public sector is crucial and significant. It consists of
government bodies with responsibilities towards the development of these industries. In
developing basic structure and in creating favourable impact, these bodies are very helpful.
Development of transportation, media and sports, cultural department, etc. are few effective
examples these government bodies (Scott, Peeters and Gössling, 2010).
Tour agencies: In order to increase the demand of this sector around the world, there are many
individual firms who focus on developing and creating business for the country. Further, in
promoting regions of UK to local audience and foreigners, these tour agencies are very helpful.
Moreover, they also provide information related to available options for the travellers. They
adopt or apply different types of promotional strategies in order to increase visitor or travellers.
Accommodation: It includes hotels, villas, apartments, etc. which are very essential for the
travellers in order to visit different place and to enjoy their visit. This is one of the factor because
of which travel and tourism sectors get huge profit (Hjalager, 2010).
TASK 2
2.1 Analysing the function of government, government sponsored bodies and international
agencies in travel and tourism
In travel and tourism these are many intermediaries like government, government sponsored
bodies and international agencies involved in travel and tourism. All have important role and are
helpful for this sector. Following are the functions of these intermediaries:
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Government: There are many policies made by the government in order to preserve various local
communities' heritage, culture and in protecting various tourist destinations. Further, government
is involved in both national and international levels of tourism (Garín-Muñoz and Pérez-Amaral,
2011). In addition to this, it also involves political philosophies and policies which are important
aspects of travel and tourism. In developing countries like India, Nepal, Uganda, etc. all the
activities for tourism are controlled by public sectors. They also helpful in forming function of
financial and technical assistance to the different tourist destinations like museums and heritage
cities for their preservation, development and growth. In addition to this, main roles of
government is to promoting destinations, developing infrastructure, implementing tourism
policies, etc. In this context, Individuals can help their government by giving timely taxes. All
the money which government get from taxes are used for the betterment of the country (Wu and
Shi, 2011). Further, government also makes sure that resources are not wasted and are preserved
properly. Another, important role played by government is to protect customers. There are many
legislations which are helpful in protecting customers rights.
Government sponsored bodies: There are many governments sponsored bodies like English
Tourism Council, British Tourist Authority, etc. Similarly, different countries have their own
government sponsored bodies. These bodies are helpful in providing information to the
government regarding the changes which takes place in travel and tourism sector. These
government bodies enforce laws and regulations issued by the government with respect to tourist
destinations. In the context of British tourism, these bodies are helpful in promoting tourism in
UK and they apply different strategies in order to attract tourist from different countries. Further,
these bodies are also responsible to use the funds provided by government preservation, growth
and maintenance of all the tourist spots UK (Papatheodorou, Rosselló and Xiao, 2010). It also
understands the needs and requirement of the travellers or visitors and according try to satisfy
them.
International agencies: There are many international agencies which look after travel and
tourism, which are WTO(World Tourism Organization), World Travel and Tourism Council,
Visit Britain, etc. In promoting tourism accessible, sustainable, responsible and universally
around the world, these agencies are responsible. World travel and tourism council(WTTC)
advocates partnership among private and public sector. It delivers resutls which are helpful to
match the need of local regional, economies, etc. UN(United Nation) which has WTO agency is
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responsible for implementation and encouraging of Global Code of Ethics for Tourism. It is
helpful in minimising the negative impact on social economic developments. ICAO(International
civil aviation organization) is helpful in bringing key industries and states together to
determining all the areas of development policies and standards, coordinates global monitoring,
delivering targeted assistance, etc.
2.2 Influence of local and national economic policy on the success of travel and tourism sector
Local and national contribution of the country is very helpful in efficiency of
development and growth of travel and tourism sector. In creating regular impact on the working
system of the country it is helpful for the market by laid policies. Through various developed
economic policies the country is managed efficiently (Spenceley, 2012). In creating effective
impact is helpful in creating growth and sustainability in the economy. For the development and
growth of both local and national level is laid on economic policies of the country. On the
success of travel and tourism sector, following are the impact of these policies:
Direct impact: This happens when the government make policies exclusively aimed at travel and
tourism sector. Government make change in their policies or develop new policies for betterment
of the country but it gets direct impact on the travel and tourism sector. For example, when a
local government subsidies developing a resort on a beach town, then this would directly affect
the tourism industry. The tourism in that particular area will get benefited with this policy passed
by the government.
Indirect impact: Monitory policies given by government are not aimed at tourism sector. In case
when because of monitory policies causes the exchange rate for currency falls, then this would
be highly benefited for the tourism sector (Seetanah, 2011). This happens as the currency of the
country becomes cheaper and tourist will have less expenses.
Sponsorship and funding: Funding and sponsorship are planned in order to develop the country.
For the better growth opportunity within the market and for better growth for tourism sector
funding and sponsorship is very helpful.
Service integration: With the help of national and local policies, individuals focus is very
important for the development of region. There are many national policies made in order to
develop image of the country within the world. These policies are made so that services and
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facilities could be improved. In creating positive integration of system within the economy, this
development is very helpful.
Economic growth: The economic development of the country is helpful in integrating effective
policies and procedures within the sector. The policies for the local development with in the
organization is very helpful in creating effective impact on the over all growth of the economy.
Further, for the growth and development of the country, economic growth is helpful for the
country with high prospects (Gössling, Hall, Peeters and Scott, 2010). Countries economy can be
improved by making developments in transportation facilities this will help the tourist form
different countries to visit important places easily.
2.3 Implications of political change on the travel and tourism in different countries
Political factors play very significant role in travel and tourism. It is helpful for the
development of growth within the sector. All the policies laid by the government is very helpful
in developing the prospects of various types of tourism. Because of political instability, negative
impact is created. This may lead to high level of risk and confusion of regional unrest. In
different countries following are the implications of political change on the travel and tourism:
Impact of internal system: Because of change in economy, counties may also face negative
impact on its economy. The overall countries' working and development is affected by
enticement unrest. This can be understood with the help of an example of Ukraine. Due to crises
in Ukraine, heavy internal disturbance occurred and this resulted in domestic riots and unrest.
This affected the tourism inversely in Ukraine (Mair and Jago, 2010).
Economic development: Economy of a country is developed when the government of that
country focus on improving their services and their facilities provided by them. All the plans for
tourism destinations are mainly focused by the sector of travel and tourism. Economic
development has proved to be helpful in giving effective measures to grow economy. Policies of
different countries are focused on creating effective source of income. For many favourable
policies it has helped in development.
Resources and system development: The civil war has helped Sri Lanka in developing effective
laws and regulations. The tourism reduced because of civil war in Sri Lanka and when they
developed policies, then slowly the tourism subsequently revived. Similarly, in Iran because of
Iraq-Iran war in 1980 tourism got highly affected and with the change in policies, slowly tourism
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increased. In this context, both the country focused on developing relationship with other
countries and this was very helpful in attracting and in promoting travel and tourism in these
countries (Frey and George, 2010). In addition to this, with the help of regulatory bodies and
authorities, these countries were able to enjoy high economic turnover.
TASK 3
3.1 Factors affecting the demand of tourism
Being a product development manager of TUI Groups. It very essential to provide
information to new manager regarding new package designed for travel and tourism. In this
context, there are many factors which would affect the demand of tourism. Moreover, sale and
profitability of the industry is also affected factors. In addition to this, the factors may different
for country to country as the lifestyle, culture, trends, etc. differ form country to country. Factors
which affect the demand of tourism are as follows:
Technological advancement: Improvement or changes in technology has boosted up the travel
and tourism sector. It has increased the number of tourist. With the changes in technology people
are know able to search and see all the places through internet and they can also compare all the
packages which are provided by the tour operators (Heung, Kucukusta and Song, 2010). In
addition to this, there are other benefits like online booking, reduced journey time, self-service
check in, etc.
Demographic changes: Demographically there are many changes which takes place in UK. This
is one of the main factors which affects the demand of the tourism. In a country if the youngsters
or young adults are high then there are chances for them to travel more than any other age
groups. In other words, the demand for tourism can be increased if tour operators design
packages for specific holidays for specific age groups.
Income level: On the demand of the tourism, income has a great influence. When the income
level of a person increases then he/she will spend more and this will also increase the demand of
the tourism. But in case of decrease in income level or recession, etc. can also affect the demand.
These type of condition occurs when supply of money reduces in the economy and decrease in
income also effects the purchasing power of the people.
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Political instability: There are countries in the world which have high risk as their may be
countries where theft is high or there are chances of terrorist attacks, etc. in such countries the
demand of tourism will get reduced as tourist will not risk their lives are visit these places.
Service marketing: This includes all the promotional activities which affects the demand.
Advertisement through print media, electronic media, etc. are very helpful in increasing or
affecting the demand of tourism (Ritchie, Molinar and Frechtling, 2010). These type of
promotion are very helpful in providing adequate information to the tourists. In addition to this,
it is also helpful in attracting customers.
Currency exchange rate: Different countries have different value for their currencies. Among
most of the developing countries, the value of their currency will be less and this increases the
demand of tourism. Tourist tent to visit places in which they could get many things even if they
spend less.
Supply: When all the tour operating companies provide same type of services. Demand of
tourism can be increased if these organizations make changes according to the needs and
requirement of the customers and provide them services which would satisfy them.
3.2 Way in which supply has changed to meet the affects of demand
As being a product developer at TUI Groups, it essential for me to provide information
regarding supply which affects the demand to new travel and tourism manager. In order to satisfy
the needs and wants of the customers, supply has a great effect on changing the demand for the
products and services. It includes all those activities which done to meet the needs and
requirements of tourist. Following are the ways through which supply has changed to meet the
affect of demand:
Tour operators: There are many tour operators who understand their customers needs, wants and
accordingly they satisfy them. In this context, their design different packages by which their
attract tourist. They develop and design plans by which they provide information which would
help travellers (Weaver, 2011). Further, all the services provided by these tour operators includes
accommodation, tourist destinations, etc. they provide these services by understanding the
requirements and according they supply their services according to demand.
Well equipped services: In this modern world, there are many improvements in the services like
online booking, quick reply to customers, providing information regarding the tour, etc. All these
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changes came into existence according to the change in demand and in order to satisfy them,
service providers supplied accordingly. Improvement in technology has helped in improving of
travel and tourism.
Special occasions: In a year, there are many occasions in which people tent to travel around the
world alone, with their friends or families. In this context, the rate of tourism increases.
According to a data most of the people travel on special occasions like Christmas or New year. It
is the period in which people get holidays and is the best time to spend time in different
countries. Further, the demand for tourism increases and accordingly the supply has to be
maintained (Narayan, Narayan, Prasad and Prasad, 2010). Moreover, all the hotels or restaurants
make strategies through which they could fulfil the needs and wants of the tourist.
Quality services: All the services which travellers or tourists receive focus providing all the
things which they may require. Only if the services provided by them is of good quality, only
then the visit of tourists will increase. In this context, service providers hire trained and highly
skilled people who would be favorable in fulfilling the needs and requirements of the tourists
according to demand.
Inbound tourism
It is the one in which a foreigner pays visit to a country. In this regard, UK travel and tourism has
ensured to attract foreigners towards the country. It has done so by making the visa regulations a
bit relaxed. Office for National Statistics further carries out face to face interview session with
random passengers when they enter or leave UK. This helps in analyzing what are the needs and
requirements of travellers (About the International Passenger Survey, 2016). UK tourism has
further focused on attracting visitors by organizing many events such as Commonwealth Games
in Glasgow and many other international events (Ward, 2015).
Domestic tourism
In order to meet the demand of domestic tourism, the need is to create shops that sell designer
clothes at a cheaper rate. They further have to open restaurants that are cheaper (Carmichael,
2009). Domestic tourism can further be encourage by encouraging the regions in UK to focus on
developing events, attractions as well as services that are suited to the needs of domestic
travellers. In the same way, the need is further to develop a code of ethics for the domestic
travellers (Domestic tourism – the backbone of the industry, 2016).
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Outbound tourism
In the same way, the demand of outbound tourists can be met by providing cheaper plane
tickets, travel insurance as well as new travel clothing. The UK government can further relax the
procedures of getting passports, visas as well as exchanging hard currency. This will help to
enhance the leisure group travelling to other nations (Arlt, 2006).
TASK 4
4.1 Main positive and negative economic, environmental and social impact of tourism
There are many negative and positive impact of tourism on economics. Travel and
tourism can only be sustained when it is managed carefully. Following are the positive and
negative economic, environmental and social impact of tourism:
Economics: In both the sectors, like direct employment and indirect sectors like transportation
and retail tourism is helpful in creating jobs. It is also helpful for the small scale business in
providing opportunities which is very essential in rural communities. It also helps in generating
tax revenue like hotel and airport taxes (Aldebert, Dang and Longhi, 2011). For the success of
tourism it is very essential to develop basic infrastructure like hotels, roads, airports, etc. In this
context, the cost is incurred on the government. This is one of the negative impact of tourism on
the country. All the jobs created are seasonal and are poorly paid. In addition to this, most of the
money generated by local communities through tourism does not benefit them. The money leak
out to other international organizations.
Social: All the improvements by developing infrastructure are very helpful for the local
communities. These local communities get highly benefited through these developments.
Tourism is helpful in encouraging handicrafts, traditional customs, in preservation of art and
craft, local heritage, cultural, etc. Better interaction among guests and host helps in better
understanding and in increasing global awareness (Impacts of Tourism, 2014). Behaviour of
visitors have great effect on the host communities. There many be tourists how involve in illegal
activities and this highly effects socially. Human rights and tourist intention is effected and this
may also lead to wearing a way of traditional values of that particular region.
Environmental: It is helpful in conservation of natural resources and wildlife and these places
are regarded as tourists spots. Travellers from different countries are attracted to see the natural
beauty of a country (Tsiotsou and Ratten, 2010). Tourism has helped in generating fund in order
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