Analyzing Inflation Impact on Virgin Holidays: Strategies & Models

This report examines the impact of inflation on Virgin Holidays, a tourism company established in 1985 by Richard Branson. It explores the causes of inflation, such as demand-pull and cost-push factors, and analyzes how these inflationary periods affect the company's operations and performance. The report highlights that inflation decreases the spending power of individuals, particularly affecting luxurious services like those offered by Virgin Holidays. It also discusses inflation management strategies that can be deployed, linking them to relevant economic models and theories. The report concludes by emphasizing the importance of managing inflation in the tourism sector, a rapidly growing industry, and suggests that strategies like increasing production to meet demand and utilizing monetary policy can help control inflation.

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Introduction (include a purpose of
poster)
Tourism is the activity of travelling across different
boundaries that can be of different countries, cities,
states or territories. The tourism can be practised either
for achieving travelling pleasures or for business
activities.
Key operations and markets
Conclusion
Inflation is an economical matter that happen in
a country and effect the market of that country
including the business entities and all the
common consumers of the market. Tourism is a
very large industry and sector in the business
world whose demand and market is rapidly
increasing in the world.
Inflation management
strategies deployed (Link
this to relevant models and
theories)
Company background and
overview
Virgin holidays is a tourism company that way
established in the year 1985 by Richard Branson. It is
a subsidiary company of Virgin Group. The company
have presence and operate on a international basis
being a native company of United Kingdom. The
company holds a great amount of market in USA and
in the Caribbean.
References
•Pencarelli, T., 2020. The digital revolution in the travel and tourism industry. Information Technology & Tourism, 22(3), pp.455-
476.
•Labanauskaitė, D., Fiore, M. and Stašys, R., 2020. Use of E-marketing tools as communication management in the tourism
industry. Tourism Management Perspectives, 34, p.100652.
Inflationary periods and main
causes
Inflationary periods is the period of time in the which the
inflation happens and the prices gets increased rapidly
making hard for people to fulfil their wants. These
period are not liked by both the customers as they need
to spend more to buy the similar products they used to
buy and the businesses as their customer base gets
decreased.
Major factors that are the causes of inflation are
mentioned in the below points :
• Demand pull inflation
• Cost push inflation
• Devaluation
• Increased money supply
Impacts of inflations on company’s
operations and performance
Tourism is an activity of travelling generally with the motive of
enjoying and having some new experiences. But is not an
essential activity that is needed by people in their day to day lives
to live. The travelling is only done when the people have high
spending power. Inflation decreases the spending power of people
on luxurious things as their essential expenditures gets increased.
This directly impacts on the company Virgin Holidays and
mostly all of the tourism sector. Also even if the customers want
to travel either if they have high income or if they need to travel
for business purposes or for some essential work, they prefer
tourism companies that provide services at low prices. But Virgin
holidays is a luxurious vacation service providing company
whose cost is very much high and the common people are not
able to afford these services at the time of inflation.
One huge cause of inflation is not completion of
demands of the people of market. For avoiding
inflation that has been caused due to the reason of
high demand in the market that has not been
fulfilled, the economists or government can assure
to build up ways by establishing new business
entities or increasing the production of the existing
companies that has been dealing in the demanded
products.
Inflation is caused when there is insufficient
supply to meet rising demand. By decreasing
earnings while increasing the supply of services
and tangible goods, collective demand can be
controlled. Monetary policy is looked at as one
way to keep inflation in the country under control.
The nation's central bank employs a variety of
strategies to control credit quality and quantity.