Analysis of Travel and Tourism Sector: TUI Group's Strategies

This report provides a comprehensive analysis of the travel and tourism sector, with a specific focus on the TUI Group. It begins by exploring key historical developments in the sector, examining how the structure of the industry has evolved. The report then delves into the factors influencing tourism demand, including political, environmental, and economic considerations, and analyzes how TUI Group has adapted its supply to meet these changing demands. Furthermore, the report evaluates the positive and negative economic, environmental, and social impacts of tourism, particularly in the context of TUI's operations, and proposes strategies to minimize negative impacts while maximizing positive outcomes. The report also references various academic sources to support its findings and conclusions. The report aims to provide a thorough understanding of the challenges and opportunities within the travel and tourism industry, using TUI Group as a case study.

Travel and Tourism
Sector

TABLE OF CONTENTS
INTRODUCTION:..........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Explain key historical developments in the travel and tourism sector..................................1
1.2 Explain the structure of the travel and tourism sector...........................................................3
TASK 2............................................................................................................................................5
Covered in PPT...........................................................................................................................5
TASK 3............................................................................................................................................5
3.1 Explain factors affecting tourism demand............................................................................5
3.2 Explain how supply has changed at TUI Group to meet the effects of demand...................6
TASK 4............................................................................................................................................8
4.1 Evaluate the main positive and negative economic, environmental and social impacts of
tourism to TUI.............................................................................................................................8
4.2 Explain strategies to minimise negative impacts and maximise positive impacts on TUI...9
CONCLUSION:.............................................................................................................................10
REFERENCES:.............................................................................................................................11

INTRODUCTION:
Tourism sector is surrounded by many factors that is affecting its growth and
development. It consists of both internal and external factors that affect directly. But in recent
times tourism sector has evolved to a great extent. It is because of expansion and development of
services in different areas. Along with this, due to increase in quality of services people are
highly attracted towards it. Besides this, government has taken strong steps towards providing
security to people and promoting tourism. This report will throw light on how change in factors
have influenced demand of tourism and what results it has on supply of services. Moreover, what
are the implications of change in political factors of different countries is studied. At last it is
described that what strategies are taken by companies to minimise impact of change. For this
report organisation selected is TUI group.
TASK 1
1.1 Explain key historical developments in the travel and tourism sector
In recent time there has been large number of developments in tourism sector. It is because
of increase in range of services that has allowed people to travel. Moreover, the invention of
internet has made it easy for people to know about popular tourist destinations (Rattan,
2015). The developments that are occurred are described below :-
1810 to 1830-
In these years there was no
facilities available to people
to travel. They also didn't
prefer to roam (Mak, 2016).
It was the time go to other
places only for work.
Moreover, there was no
historical places or
1880 to 1910-
During this period, people
wanted to explore new culture
in London. But there was no
such source through which it
can be done. Thus, people go
from one place to another by
walking (McKercher, 2016).
1950 to present -
In this era there has been
significant changes in
technology. It has allowed
travellers to gain knowledge
about places easily (Mak,
2016). Also, flexibility in
travelling has encouraged
people to travel. Freedom of

monuments.
1840 to 1870-
This was the time when
development of railway was
done. It provided a platform
to travel. It was mostly
preferred by people rather
than ship (Rattan, 2015).
Railway tracks was
expanded in different to
increase range of
transportation.
movement has influence
tourism sector greatly.
REFERENCES:
Rattan, J.K., 2015. Is
certification the answer to
creating a more sustainable
volunteer tourism
sector?. Worldwide
Hospitality and Tourism
Themes, 7(2), pp.107-126..
Mak, B., 2016. Keynote
Paper: The Tourism and
Hospitality Industry Quality
Management System in the
Middle East.
Komppula, R., 2014. The
role of individual
entrepreneurs in the
development of
competitiveness for a rural
tourism destination–A case
study. Tourism
Management, 40, pp.361-
371.
McKercher, B., 2016.
Towards a taxonomy of
tourism products. Tourism

1920 to 1940-
In this period, people didn't
like to travel. They were not
aware about transportation
services. Slowly there was
development of transportation
(Komppula, 2014). Before
this, people travel by ships.
Also, there was no facilities
that can be provided to people.
Management, 54, pp.196-
208.

1.2 Explain the structure of the travel and tourism sector
Tourism sector contains a very complex structure in which there are variety of services
included. It shows that how tourism sector is divided into various categories. The structure
of this is given below -
Travel services - In this
service are included that
helps in travelling from one
place to another. People
travel by using transportation
such as buses, car, trains,
aircraft, etc. (Boniface and
Cooper, 2016).
Tourism services They
include services in which
travelling, stay in hotel and
other services are included. It
is like a complete package
Conferences and events -
Large scale organisation
organises events and activities
to promote tourism in different
countries (Moutinho and
Vargas-Sanchez, 2018) This is
done to provide opportunities
for companies to grow and
expand in countries. It helps in
providing services to people at
large scale.
Accommodation services –
theses services are related to
person food arrangements and
other. In contains hotels,
restaurants, etc. these services
depends on type of package
and cost of it. Without proper
accommodated services people
will not be able to travel. In
Passenger passport – The
passport department is
controlled and regulated by
government. It provides
services like issue of visa,
tickets, etc. They provide
proper guidance and issues
guidelines regarding rules
and regulation that has to be
followed by people.
Collaboration of private
and public sector –

where people gets all
services combine of
hospitality and tourism
sector.
Passenger transport
services – They are
complementary services that
is provided to passengers. It
includes documentation,
visa, etc. in this activities are
done that allows people to
travel to their destination
(Cucculelli and Goffi,
2016).
this hotels, transport, etc. are
there. By using this people can
easily travel.
Government have
collaborated with other
private firm that helps in
providing high quality
services to people (Boniface
and Cooper, 2016). They
play a vital role in this. They
are responsible for
developing policies and laws
that has to be followed by
companies operating in this
sector.
REFERENCES:
Boniface, B.. and Cooper,
C., 2016. Worldwide
destinations: The geography
of travel and tourism.
Moutinho, L. and Vargas-
Sanchez, A. eds.,
2018. Strategic Management
in Tourism, CABI Tourism
Texts. Cabi.
Cucculelli, M. and Goffi, G.,
2016. Does sustainability
enhance tourism destination
competitiveness? Evidence
from Italian Destinations of
Excellence. Journal of

Cleaner Production, 111,
pp.370-382.
TASK 2
Covered in PPT
TASK 3
3.1 Explain factors affecting tourism demand
There are various changes that occurs in every business sector. It directly affects the
operations of business that impact their growth and development. As far as tourism sector is
concerned, it operates in an environment that is surrounded by various factors (Elbaz and
Haddoud, 2017). Therefore, any changes in various factors will affect its growth. Usually, major
change in factors that has occurred is related to security and safety of people. This has resulted in
high decline in demand. It has forced tourism companies to improve their quality of services so
that business can be expanded. Apart from this, there are several factors that has affected demand
of international tourism. It is described as below :-
Political factors – Generally, people prefer to travel in those countries which is safe. But it is not
possible to analyse when and how political condition in any country will change. However, if
any change occurs it creates a poor image of it (Nurse, Stephenson and Mendez, 2017). In
many countries there is not proper stability of political relation. Thus, it has affected demand in
tourism sector.
Environmental factors – In present time many natural disaster has occurred. So this has crated a
feeling of fear among people to travel to disaster prone areas. In many countries like Japan,
Nepal, etc. natural disaster has created high impact on countries' tourism sector. This might be
the reason demand has decreased in tourism sector.
TUI has expanded their services in many countries (Armenski, Dwyer and Pavluković,
2018) Therefore, change in factors has also affected TUI. The tourism demand is affected. It has

affected TUI in negative way and restricted their growth and expansion. Company must take
appropriate measures and develop strategies on how to minimise impact of factors. Besides this,
some reasons are discussed below :-
Price factors – This is the major factor that is affecting tourism demand. Due to increase in
competition in tourism sector every company growth is affected. It is because of following of
competitive pricing strategy by business. Apart from this, there has been constant fluctuations in
pricing strategies. This has affected TUI (Forno and Garibaldi, 2015). Due to this they are not
able to retain their customers. They have to frequently make changes in prices. So it has become
difficult for TUI to maintain stability in price. Moreover, transportation cost has increased. It has
forced TUI to increase price. They are not able to target specific market. Overall, change in these
factors has lead to reduction in demand as well as growth.
Non price factors – It consists of income level of people, economy of country, etc. Rise or fall
in both of them has affected demand (Crotti and Misrahi, 2015) It is because these both factors
are related to tourism sector. People travel when they have high income level. Also, rise in price
of services has made tour packages expensive thus restricting people to travel.
Terrorism – The rise in terrorist attacks has allowed countries to impose strict restrictions on
tourist. Companies have stopped providing services in those countries where there is a threat of
having terrorist attacks. Also, it has created feeling of fear among people to travel in those
countries. For example – Terrorist attacks in Paris and US (Mahrous and Hassan, 2017).
3.2 Explain how supply has changed at TUI Group to meet the effects of demand
The internal and external environment in which business operates directly affects it. It
includes social, political factors, etc. tourism sector have to corporate with changes in as it
operates within it. Tourism sector is having many subsets. It works together with hospitality
sector. This helps in providing variety of services to people. Now a days people behaviour has
changed, they want to spend leisure time with their family. In order to respond to factors TUI
management has modified their plan (Xiang, Magnini and Fesenmaier, 2015). They have
focused on meeting needs of people by providing various services. It has affected supply as
specified below :-

Offering Environmental Sustainability: - TUI is now focusing on providing eco tourism
services to people. It is done to protect environment as well as promoting eco tourism. TUI using
renewable resources in transportation to decrease pollution level. It has provided an area where
TUI can grow and develop. It has created a positive image of company
Following Laws and Legislation:- TUI is a multi national company. They are providing services
in different countries. Thus, TUI can follows rules and regulations of different countries. For this
management can develop policies (Kaenzig, Rebetez and Serquet, 2016). By following rules
and regulations TUI can expand their services. It will also help in increasing profits. Besides this,
TUI can sustain for long term in the market.
Reducing tourism in countries with unstable political conditions: There are many countries that
is highly affected by terrorist attacks. So TUI can stop or reduce providing their services in those
countries. This will help in maintaining reputation of organisation.
Raising quality of services and accommodation: TUI has improved their service quality in order
to meet demand of people. This is done by providing training to employees and hiring highly
skilled and qualified staff.
Enhancing use of technology- Technology plays a crucial role in every business to improve
service quality as well as developing products (Adhikari and Bhattacharya, 2016). With rise and
expansion of internet, it is easy to communicate. TUI management has increased the use of
technology in providing services. It has helped them to solve customers problems effectively and
quickly.
Competitive pricing strategies- Due to increase in competitors TUI has implemented competitive
pricing strategy. It has helped them to provide high quality services to people at low cost. Also,
they are formulating tour packages and then setting price structure (Scott, Hall and Peeters,
2016). This has helped them to attract more customers towards them.

TASK 4
4.1 Evaluate the main positive and negative economic, environmental and social impacts of
tourism to TUI
Tourism sector has majorly operators in external environment so it is also highly affected
from it. The factors that are included in this are economic, environment and social. Any change
in these directly have a direct impact on entire tourism industry. Usually, people travel to explore
culture of different countries.
The positive impact of having a better economic condition is it increases flow of foreign
currency in the country (Boniface and Cooper, 2016) This contributes towards increasing GDP,
economic growth of country. Besides this, it allows government to focus on improving countries
image by promoting tourism. It will lead to rise in revenue of government. Thus, overall positive
impact will be boost in tourism sector of country.
Its negative impact will be due to flow of foreign currency, it will rise the rate of tax. This
will lead to increase cost living of people. Government will impose more tax for visiting tourist
destinations. Thus, local people will not be able to visit those places. Along with this, increase in
services will affect the condition of local people (Moutinho and Vargas-Sanchez, 2018). They
will find it difficult to cope up with them.
According to environmental aspect rise in tourism will force government to create proper
laws and regulations. This will enable local bodies to protect environment by implementing
policies. These efforts will conserve wildlife sanctuaries, parks and other natural resources. It
will help in preserving resources and maintaining quality of environment. This will create a
positive image of country and government.
The negative impact is people will visit wildlife sanctuaries, parks, etc. so it will lead to
destruction of flora and fauna (Iyer, Dey and Chakraborty, 2015) Moreover, increase in
transportation will result in rise in pollution level in that area. Furthermore, this will disturb the
atmosphere of that region.
Social factor consists of culture and values of community and people. The positive
impact will be people will get to know about ethics and values of society. This will give them

knowledge about type of culture followed by people. During festive seasons increase in tourists
will rise revenue of government. Popular festivals attract large number of people to visit country
for example- the La Tomatina festive of Spain s very popular.
On the other hand negative impact will be during festive season there might be threat of
having terrorist attacks (Zeng and Gerritsen, 2014). Also, some people might cause harm to
others. This will result in conflict between community and government. Moreover, it will create
a bad image of country in the world.
4.2 Explain strategies to minimise negative impacts and maximise positive impacts on TUI
Business develops different strategies to minimise impact due to change in factors. This
helps in smooth running of operations and improving their efficiency. Also, it is supports in
sustaining for long term in the market. The main purpose of developing strategies is to grow
continuously (Law, Lipman and Jiang, 2016). Tourism is an industry which is highly affected
by several factors. Thus, it is very important to minimise the negative impact of factors in
tourism sector, Other wise it can will affect their growth and development. For this several
strategies should be developed so that measures can be taken in proper time. It will be useful to
minimise the impact (Elbaz and Haddoud, 2017). With the help of strategies TUI can expand
their services in Greece and Costa Rica.
First of all TUI can develop strategies to reduce the negative impact. It is the best and
easiest way that will be beneficial for TUI. Also, they can protect historical monuments by
providing some funds to local bodies for their maintenance. It will help in creating positive
image of TUI. Moreover, they can diversify services. TUI can develop packages by doing market
segmentation (Nurse, Stephenson and Mendez, 2017). Furthermore, reducing cost will help in
retaining customers. Also, improving service quality will increase customer satisfaction.
Other than this, TUI can involve more in CSR activities. This can be done by organising
campaigns, workshops on social welfare programs. It will create a positive image in the society.
Moreover, they can make efforts to protect the environment. For this policies and rules should be
developed. It will enable TUI to maintain atmosphere quality in areas in which they are operating

(Armenski, Dwyer and Pavluković, 2018) In this way, it can respond to change in social and
environmental factors.
Sustainable tourism: - this is the best way by which TUI can expand in tourism sector. They can
provide services related to eco tourism. It will help in attracting large number of people. Besides
this, promoting green and sustainable tourism will help in conserving natural resources. Services
such as transportation can be provided by using renewable sources (Forno and Garibaldi, 2015).
It will be beneficial in reducing pollution. Also, it will encourage other companies to promote
sustainable tourism.
Reducing tourism in sacred locations- there are some location in which there is risk to visit. It is
because of community living there. They can harm people. Tourist throws litter or disturb them
by entering in their area. Therefore, companies can reduce tourism in those areas.
CONCLUSION:
This report concludes that government and local bodies plays a vital role in growth and
development of tourism sector. It operates in an environment that is surrounded by various
factors. Therefore, any changes in various factors will affect its growth. Tourism sector is
having many subsets. It works together with hospitality sector. This helps in providing variety of
services to people. Tourism sector has majorly operators in external environment so it is also
highly affected from it. The factors that are included in this are economic, environment and
social. Tourism is an industry which is highly affected by several factors. Thus, it is very
important to minimise the negative impact of factors.

REFERENCES:
Books and Journals :
Adhikari, A. and Bhattacharya, S., 2016. Appraisal of literature on customer experience in
tourism sector: review and framework. Current Issues in Tourism, 19(4), pp.296-321.
Armenski, T., Dwyer, L. and Pavluković, V., 2018. Destination competitiveness: public and
private sector tourism management in Serbia. Journal of Travel Research, 57(3), pp.384-
398.
Crotti, R. and Misrahi, T., 2015. The travel & tourism competitiveness index 2015: T&T as a
resilient contribution to national development. The Travel & Tourism Competitiveness
Report, 2015, p.13.
Elbaz, A.M. and Haddoud, M.Y., 2017. The role of wisdom leadership in increasing job
performance: Evidence from the Egyptian tourism sector. Tourism management, 63,
pp.66-76.
Forno, F. and Garibaldi, R., 2015. Sharing economy in travel and tourism: The case of home-
swapping in Italy. Journal of Quality Assurance in Hospitality & Tourism, 16(2), pp.202-
220.
Iyer, V.R., Dey, N. and Chakraborty, S., 2015. Advent of information technology in the world of
tourism. In Emerging innovative marketing strategies in the tourism industry (pp. 44-53).
IGI Global.
Kaenzig, R., Rebetez, M. and Serquet, G., 2016. Climate change adaptation of the tourism sector
in the Bolivian Andes. Tourism Geographies, 18(2), pp.111-128.
Law, A., Lipman, G. and Jiang, M., 2016. Transitioning to a green economy: the case of tourism
in Bali, Indonesia. Journal of Cleaner Production, 111, pp.295-305.
Mahrous, A.A. and Hassan, S.S., 2017. Achieving superior customer experience: An
investigation of multichannel choices in the travel and tourism industry of an emerging
market. Journal of Travel Research, 56(8), pp.1049-1064.