Analyzing Contemporary Issues for TUI in Travel and Tourism

This report provides a comprehensive analysis of the travel and tourism sector, focusing on the challenges and opportunities faced by TUI. It begins with an introduction to the growing demand in the travel and tourism industry, highlighting TUI's operational scope and the major issues impacting the sector, such as technological advancements, environmental awareness, and security concerns. The report then delves into an analysis of these issues using various resources and methods, including PESTLE analysis, and explores current trends like inbound and outbound tourism, grey tourism, and health tourism. Furthermore, it discusses strategies for TUI to respond to market changes and the impact of these changes on the business. The report concludes by summarizing the key findings and emphasizing the importance of adapting to the evolving landscape of the travel and tourism industry.

Contemporary
Project

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Issues bringing change in travel and tourism sector.........................................................1
1.2 Analysing various issues with the help of different resources and methods....................2
TASK 2............................................................................................................................................3
2.1 Current trends in travel and tourism sector......................................................................3
2.2 Covered in poster..............................................................................................................4
TASK 3............................................................................................................................................4
3.1 Respond to change in travel and tourism businesses.......................................................4
3.2 Develop strategies to respond towards changes...............................................................6
3.3 Justification of strategies..................................................................................................7
TASK 4............................................................................................................................................7
4.1 Impact of issues and trends ..............................................................................................7
4.2 Consequences of businesses which respond to market changes......................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In this modern era, the demand of travel and tourism business is increasing day by bay.
Now, it has become one of the largest growing sectors. In addition, tourism has taken place in the
service industry; it also provides transportation and hospitality services to people in order to give
maximum satisfaction. However, there are certain major aspects that can put a huge impact on
travel and tour operators (Desbordes and Richelieu, 2012). TUI is the chosen organisation in this
present assignment that works under International Airlines Group and its headquartering is in
London. The firm has owned 547 aircrafts which provide services in almost 268 locations. Apart
from this, the report will describe current major issues of travelling sector. Certain methods will
be discussed in order to reduce these issues. Furthermore, impact of current trends and changes
in travel and tourism sector will be also described. In order to perform effectively in the target
market, it is essential for managers to develop business strategies and policies.
TASK 1
1.1 Issues bringing change in travel and tourism sector
Travel and tourism has now become the fastest growing sector in world. In the past years,
it has revealed a radical change in terms of growth and advancement. In the UK, there are several
tourist places which can attract customers. Tourism sector also contributes directly in GDP rate
of the country in order to improve its economic condition. Although, the expansion is beneficial
for an economy but it also generates other issues which affect business of travelling companies.
Therefore, it is necessary for the managers to reduce these barriers or obstacles which can put a
direct impact on the working activities of business organisation (Dickinson and et. al., 2014).
Europe is a prominent place for tourism and it is always full with crowd. Below mentioned are
certain major issues and problems which can hamper the business activities of TUI: -
Technological advancement – It is one of the major issues that have changed dimensions
of travelling sector in past few years. With the assistance of technological advancement,
companies can definitely boost up the quality of its services. For example- TUI is providing the
facility of online booking to visitors; it is possible because of technological advancement.
Travelling companies tend towards various social media channels and search engines in order to
reach a large number of people. It also aids them to explore the best destinations of world as
customers can plan their holidays accordingly.
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Increased environmental awareness – It is something which is helpful to prevent nature
towards any kind of harm. Travelling companies contribute some percent of its profits in order to
increase awareness among people regarding environment or nature. Developing trends, i.e. green
tourism is promoted safety and prevention of environment. It helps people in enhancing their
knowledge towards a specific place.
Increasing security – It is the moral or ethical responsibility of travelling companies to
arrange some aspects for safety and security of people as well as whole society. Tourism industry
is developing day by day so that improvising safety and security is a major challenge for
government as well as travelling agencies (Hall and Page, 2014). Due to maximise the era of
tourism business, disposable income of people is also increases; they are spending a lot on
travelling. But the fear of terrorist attack can impact on growth and vitality of this sector.
1.2 Analysing various issues with the help of different resources and methods
Travel and tourism industry is known as a dynamic sector in which changes are essential
and it is also influenced by the other factors. There are several sectors which are being arising
day by day as per their development. Along with this, all tourist destinations have some
similarities and dissimilarities that can generate various issues which influence an economy as
well as overall business. Europe is one of the best travel destinations with having a wide cultural
history. It has been ranked in top 10 countries across the globe. In 2013, almost 1875400 people
visited the country. Besides this, travel companies are also facing various issues and problems.
The government is also not very much supportive and certain strict laws or legislations which
can reduce the interest of visitors towards travelling. Apart from this, global warming is also a
big problem that harms individuals’ life and health (Ladkin, 2011). It can put high impact upon
ecological balance of environment as well as a nation's wildlife.
UK government is very strict about laws and regulations which can levied upon people
and hinder the growth of tourism. In this competitive, travelling companies are rapidly increasing
their service costs in order to gain high competitive advantage. But it is not possible for all
persons to afford this costs and its results they starts avoiding to visit this place. Due to lack of
training or guidance, staff members of travelling agencies are not able to provide effective
services to customers; this can negatively affect the sales and profitability of these business
organisations. Market competition in between different travelling agencies has also enhanced
immensely. Due to this reason, they starts to provide wrong information about a specific place in
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order to attar customers; sometimes it can destruct the market image of this location.
Furthermore, tourism business is also affected through terrorist activities and Barbary pirates
within a nation. It results, people hesitates and avoid to go on such places. The wide era of
tourism business can hinder environmental balance which leads various health problems in the
public. Pollution and arise in toxic waste are influencing health of people; it generate illnesses,
i.e. asthma cause of air pollution in society. There are certain changes in cultural of a country
can also be seen; various practices, i.e. drinking, smoking, gambling also put a huge impact on
dignity of a nation. Therefore, in order to reduce the impact of these alterations, it is essential for
TUI to develop effective technology so as to achieve its goals and objectives.
Tours and travel business is emphasised on security of customers in outbound tours. TUI
also considers safety and security while visiting places before offering the packages and travel
facilities to customers. In North Africa there is increasing terrorism activities and anti-
governmental fights have frightened the customers to visit there. In addition, terrorism activities
are continuously seeking to attack foreign nationals in North and Middle East Africa.
Thus, Middle East and North Africa are facing similar situations. For instance in Syria, situation
is unsafe and impulsive as civil war between government and the locally armed anti-
governmental forces is continuing. The climatic conditions in the region of North Africa and
Middle East are very harsh due to extreme heats in summers. Thus, such sessions are off-session
for travel companies like TUI to plan and package.
TASK 2
2.1 Current trends in travel and tourism sector
In tourism sector, various sites are turning into attractive tourism places due to sensitive
nature of dark tourism. It results, people are less interested to visit such places, but in modern
time certain individual prefer to follow these places to get information about history. British
government is trying to improve the effectiveness of these cultural locations in order to attain
people (Morgan, Pritchard and Pride, 2011). Apart from this, travelling organisations, i.e. TUI is
making divergent tour packages as per the needs and demand of people; managers also focuses
on providing best comfort level to customers. All this helps in increasing sales revenue and
profitability of the firm in a certain time period. Therefore, it is very essential to understand the
reason behind these changes. Key trends of tourism sector is stated as under: -
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In bound tourism – In this context, it has been analysed that how many people have
visited this place. And are they happy with customer services of the company or not. According
to the authority, the total number of overseas tourists had been overall declining slightly after the
year 2007. Here are some possible reasons. First, due to RMB appreciation and the fluctuation of
the exchange rate, the cost for travel to UK goes up, and many potential visitors are thus turning
to other destinations. Another is economic recession in European and American countries leads
people to spend less money in traveling while European and American guests contribute a large
proportion to the country's inbound market. Air pollution and food security problems arising in
recent years cause some foreign visitors to worry about the travel conditions and cancel their
plans for UK.
Overview of UK visitors in
2016
Statistics Change from last year
No. of visits 37.61 m 4.14%
Total Expenditure 22.54 bn 2.14%
Total nights spent 277.9 m 1.55%
Average length of stay 7.37 -2.52%
Average spend per visit 599 -1.99%
Grey tourism – In this type of tourism the managers are recognised the interest of old age
people towards tourism activities. In grey tourism, travelling entities are tried to develop its niche
market by providing needs and wants of old age people. Such kind of tourism is evolved because
the income level of these people is more disposable. Most important, senior citizens are willing
to spend their leisure time in entertainment activities.
Gastronomy tourism – The tourism is used where the purpose behind tourism to
understand the local cultural, i.e. food and drink. Getting knowledge about local taste, is the
crucial priority of all tourists.
Health tourism – The tourism contributes in order to improve health and fitness level of
people. It also encompasses physical, mental emotional etc. all other elements which can hamper
health as well as life cycle of society (Moutinho, 2011). Health tourism is also developing as the
people show their interest towards medical facilities.
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Religious tourism - There are several people who are involved in spiritual and religious
activities. It comes into the existence, when visitor wish to visits monuments and further
religious sites in order to get information about nation's religion.
Outbound tourism: Outbound tourism can be understood as the form of tourism when
people are travelling outside the boundaries of their country so as to explore the other places. In
2016, with income growth and tourist consumption upgrade, as well as as well as visa, flight and
other convenient factors, UK’s outbound tourism heat continued. The number of UK’s outbound
tourists reached 122milion in 2016, increasing by 4.3% compared to the year of 2015 with 117
million outbound tourists. UK has remained the world's largest number of outbound tourists for
consecutive years. However, UK's outbound tourists are still less than 10% of the country's total
population, and only 10% of the population hold the passports, which suggests huge potential in
UK’s outbound travel market.
(Source: Travel and Tourism in 2018)
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Illustration 1: Current trends in tourism

2.2 Covered in poster
TASK 3
3.1 Respond to change in travel and tourism businesses
In order to respond quickly and effectively to external environment; it is essential for
travelling companies conduct a PESTLE analysis. Through which it will be covered all those
aspects which can hamper growth and vitality of business organisation. Below mentioned the
PEST analysis of International Airline Group: -
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(Source: The Marketing Environment, 2017)
Political factors It relates with certain rules and regulations which are created by
government. IAG operates in operates in both national and international
airlines, so that the firm has to compliance all legal laws and legislations
which can control business activities of company. Apart from this,
unstable political condition of UK due to coalition legal authorities
(Ladkin, 2011). In January 2011, the VAT was increased by 20% which
affected IAG and its shareholders.
Economical factors Such factors can put a huge impact on business practices as well as the
decision making process of the company. In recent years, recession is
decreased the number of travellers in UK. Financial crises also
influence the income level of people as they cannot spend money on
entertainment activities. Another risk is, rising fuel prices which can
also increase production and service cost.
Social factors Social environment also affect the business organisation. In UK, the
number of older generation is more rather than younger or elders. Old
people normally prefer to spend their time to visit different place; it can
become potential opportunity for IAG. Apart from this, social
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Illustration 2: PESTLE analysis

environment also generates various issues (Pritchard, Morgan and
Ateljevic, 2011). For example- if company does not fulfil needs and
wants to employees then it will be increases strikes and lockouts that
can harm market reputation of airline industry.
Technological factors Some technological factors are stated as- digital disruption, growth of
multiple technology, new aircraft reduce fuel consumption, engineering
and maintenance as well as in-flight operations.
3.2 Develop strategies to respond towards changes
In order to respond effectively towards changes, it is essential for companies to develop
adequate strategies and policies. It helps travelling agencies to achieve its goals and objectives in
a certain time period. Apart from this, changes in business environment can impact on its
activities in positive and negative manner. Regarding in this matter, business entities have to set
long term and short term goals with a proper time schedule (Hall, 2013). While developing any
strategies, decision makers are required to review these strategies in order to assign roles and
responsibilities in a proper manner.
Apart from this, British Airways is one of the famous airline association of UK by having
more than 600 air crafts. In British there is one more company, i.e. Iberia which deals in travel
and tourism sector. Hence, it it is one major competitor of BA. However, in order to compete all
rivals it is essential for British Airways to modify its current strategy so as to get more profits or
turnover. In this context, the firm can adopt new product development strategy; in which firm are
produced new products and services (Sharpley and Telfer, 2014). With this assistance, BA can
easily gain high competitive advantage in target market. Along with this, if customers will get
new and attractive services then they will more encourage to invest in tour packages. Now these
days, firms also emphasis on providing hospitality as well as transportation services to its
customers in order to provide them maximum level of satisfaction.
Iberia – It is also a part of International Airline Group. As the company is interlinked
with service marketing association, so that firm is required to focus on all elements of marketing
mix. It contains four major factors, such as – product, price, promotion and place. The marketing
mix strategy supports that company needs to provide right product to right customers on an
average price. It also have to effective channels of promotions so as to reach target audiences.
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3.3 Justification of strategies
All these above mentioned strategies could be immensely assistive by improving the level
of marketing. The strategy of new product development is emphasis to provide new products and
services to target audiences by satisfy their needs and wants. British Airways is using this
strategy so as to face all issues and future challenges. Effective and optimum utilisation of
available resources could helps a firm to high competitive advantage (Smith, 2014). The prime
motive to using new product development strategy is to respond quickly towards all external
forces and provide guidance to all working activities and tasks.
Despite this, Iberia is using marketing mix policy in order to build up strong goodwill at
marketplace. In addition, it is accessible in attaining and retaining for long term period. Through
an average price, the travel agency can easily manage its sales and profits; it also high return on
investment from customers viewpoints.
TASK 4
4.1 Impact of issues and trends
In this dynamic nature of environment, business organisations are being faced different
issues and challenges. Myla travel is one of popular travelling company which has almost 10
offices in United Kingdom. It is a growing and developing firm which always serve something
new to its clients. In this sense, several issues and problems are faced by company which can put
huge impact on overall business.
Impact on employment level – In recent years, travelling is rapidly growing; it has put a
positive impact on employment level of a country. For enhancing their business activities,
travelling firms are required large number of workforce in order to handle or control its
operations (Stone, 2012).
Impact on business – Tourism companies who are involved in hospitality business, can
gain high level of growth. As the use of effective tools and techniques, Myla travel is capable to
deal with increasing the demand of tourism. Furthermore, environmental awareness is also affect
business activities; government has set clear instruction towards wastage which must be followed
in proper way.
Impact on product and service – Another issues is related with uncertain economic
feature and security measures. This can increases service quality of products tremendously.
Other areas of travel and tourism which are affected by tourism: -
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 Lack of proper infrastructure - Lack of infrastructure can have a high impact on the
efficiency and functioning of the companies within travel and tourism industry. In the
absence of proper infrastructure the operations of the company could not be carried out
with full efficiency.
 Human resource - Continuously advancing technology and business operations has
increased the need for having competent staff in place, which can properly use and
understand the new technology. Even if the company has successfully adopted a new
technology but it does not expert staff, maximum advantage might not be attained.
 Service level - The service level in travel and tourism industry must be very good. The
employees should be very helpful and co-operative. In case of poor service levels the
customers might show reluctance for any particular travel and tourism company.
 Lack of Differentiation – It is considered as being a chief challenge faced by travel and
tourism industry. Due to presence of several small and large companies offering similar
products and service the level of competition is quite high in travel and tourism industry.
4.2 Consequences of businesses which respond to market changes
Now, travel and tourism industry is become successful as it also offers in coastal areas,
clean beaches and archaeological sites. Myla travel is rank as top 28th among 150 countries.
Travelling sector has been achieved first position in middle east in 2013. Therefore, in order to
manage this position companies have to focus on providing more satisfactory services to
customers. Certain changes also affect these organisation's plans and policies. But in case if a
company fails to adopt these changes then it can ruins its sales and profitability. It leads low
market growth and development (Wachowiak, 2016). It can also decrease the number of
customers and the interest of stakeholders towards company. Through which the financial
position will also goes down.
Apart from this, it will increases production costs of operations and the firm cannot
achieve high competitive advantages. These changes can also affect vision and mission of the
firm and further growth opportunities. It could also hinder the relationship of firm with its
suppliers that can stop the availability of raw materials and ruin the quality of products.
CONCLUSION
From the above mentioned report, it has been summarised that the growth and
development of travelling sector is rely upon the the attractiveness or effectiveness of tourist
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