Unit 1 The Travel and Tourism Sector Assignment Copy 2
LO 3. Understand the effects of supply and demand on the travel and tourism sector
3.1- Explain factors affecting tourism demand
Tourism is perfectly demand oriented. There are few factors those use to influence the demand for the tourism and the purchasing behaviour of eh travellers for the tourism destination in an effective manner. The demand for the tourism is highly dominated by the external competitive forces as below:
Disposable income of the customers: The economic state of any nation along with the disposable income of the population is directly linked with the dean for the tourism designations. It is the most important aspect that is considered by the mass population of the global market for the selection of the tourism destination being within their budget(Tourism Alliance, 2015). During the recession time, the disposable income use to get decrease, as well the tourism demand also use to get fall. The stable disposable income can be observed for UK, thus, the speeding on the tourism also has been increased as below;
Also in the year the arrivals of the International tourists for the worldwide tourism destinations has been mentioned as below:
Thus, with the average increase in the disposable income, the demand for the travel and the tourism also has been increased(UNWTO, 2015).
Advanced technology usage: Wit the advancements of the technologies, the better communication, transport, and other supports use to influence the selection of the tourism destination in an effective manner. The online booking is the major aspect in this section. The hassle free technology usage in the travel and the tourism industry use to attract the attention of the population. The digital travel sales in the worldwide travel market has been described as below:
- Change in preference: The change in preferences and the taste of the customersalso use to influence the tourism demand in an effective manner. The market trend of the tourism market is ever changing with the available options for the competitors and also sue to the usage of technologies(Emarketer, 2015). So, it is required to consider the consumer reference before the section of the offerings for the overall travel and the tourism sector.
- Time availability: The time availability also is the most important section from the busy schedule of the mass population of the world market from their personal & professional life. The world population use to get the less leisure time with their familymembers. But, still, there are other modes ofthe tourism demand in the form of the official meet and the official tour purpose(Emarketer, 2015).
- Cost of the complementary goods: The cost of the complementary goods associated with the travel and the tourisms sector also is another determinant fact for the demand. If the cost will rise, thedemand simultaneously use to fall.Other than that the natural disaster the tours attack also are the influencingfact for the tourismdemand in an effective manner.
3.2- Explain how supply has changed at TUI Group to meet the effects of demand
TUI group has the effective global supply chain to meet up the demand of the tourism industry (TUI, 2016). The aim of the organisation is to extend the reach of the sustainability to all the suppliers and also to monitor their progress in aneffective manner. The process to manage the supply to meet the demand of the tourism are as below:
- Offering the environmental sustainability by involving the community during the development stage of the hotels ad destinations, Consult with the TUI travel sustainability manager, protection of the roomsfrom the sunlight radiation , maintain the greenery are the important steps done by TUI and itssuppliers to meet the change in the taste and preferences of thecustomers(TUI, 2015).
- Setting the minimum standards to thes uppliers by developing the sustainability certificate schemes for the supers also use to boost up the continuous improvement of the supers with their suppliers to meet the change in the demand of the mass population(TUI, 2015).
- The rewarding process to the suppliers as the “Environment champion also boost up the suppliers to deliver their set in offering the goods and the services to thecustomers.
- The animal welfare to attractmorecustomers to the wild life also is maintained by the suppliers of TUI(TUI, 2015).
- Offering trainingand development skills to the suppliers also use to facilitate the maximum effort delivery by the suppliers.
- Thetravel foundations tools are also used by the supers such as: Green accommodation tool, communication tool, sustainable tourism policy tool, water and energy tool so that more customers will beattractedtowardsthe travel group to avail their services.
LO 4. Understand the impacts of tourism
4.1 – Evaluate the main positive and negative economic, environmental and social impacts of tourism with reference to TUI Group businesses
- Economic impact: The economic condition of Spain is booming. The economic condition of Spain has grown by 3.2 percent in 2015 than 2014 and it is expected to end by 2.7 percent more by the end of the year 2016 (Forbes, 2016). Thus, the positive impact on the travel and tourism in TUI can be expected in an effective manner.
- Social impact: The technological advancements and the choice of the population of Spain towards the leisure destinations also is considered to be the expected positive impact on the TUI business operations. The travel and the tourism investment by Spain in the year 2014 was EUR 13.5bn and it is expected to get rise by 3.5 percent Pa. Thus, the positive social attachment and the good development of the economic condition can be observed (WTT, 2015).
- Environmental impact: It has been declared by the OECD environment program that still Spain need to developtheirenvironment conservation policesthat the green accommodation aim by TUI can be maintained. Thus, the less attention for theenvironmentalaspects can be observed in the TUI business operations. So, TUI has to work withthose fact to attract more customers to avail their sustainableenvironment friendly travel atmosphere.
- Economic impact: The economic condition of Egypt is the highly focused centralized economy to have the positive impact on the Travel and Tourism business environment like TUI group. But, as per the latest situation, the expected to slow down to 3.3 percent by the end of the year 2016. Thus, it is expected to have a little negative impact on the inbound tourism of the country in an effective manner(Worldbank, 2016). Thus, TUI group is required to have a strategic plan to cope up with the economic situation.
- Social impact: Due to the instability of the Egypt, the rate of the visitors have been declined. Due to this impact of the Egyptian revolution, the revenue earned by the travel and the Tourism has been declined from £250 million in 2010 to £10.5 million in the year 2014 (Dailymail, 2014).
- Environmental impact: the soil loss, air pollution, and the urban growth have been resulted to the negative impact of the environmentalcondition on TUI group as well as the other travel and the tourism industryin a negative manner. Thus, TUI group should focus on the green environmental aspect so that they will be able to attar ore customers towards them.
4.2 - Explain strategies that can be used to minimise the negative impacts while maximising the positive impacts TUI Group businesses
To focus on the environmental aspect, the strategic step taken by TUI group is the usage of the carbon footprint. This carbon footprint can be used for the making of the fuel reduction in an effective manner. They use to take three basic steps as the strategic move as below to cope up with the positive and the negative environmental impacts in their distinctive operating country.
- Step lightly: Reduction of the environmental impacts of the holiday’s trough their own operations of the energy conservation. This can be done using the carbon footprint, using the recycled material, conservation of the water sources with the recycling options, and others. They are expecting that with the move of using the most carbon efficient airlines and the carbon intensity through their operations, they will be able to make the reduction in the pollution by 10 percent by 2020.
- Making a difference: Creating the positive change for the people and the communities through their strong value chain will be able to make them efficient to make a difference. They have planned to deliver 10 million “Greener and faire” holidays per year by 2020. This will also make the local communities able to share the benefits of the holiday. This will make the local people feel valued and thus the social stability will be attained is a slow but steady manner(TUI, 2015).
- Lead the way: For the sustainable tourism, they can make ore investment in the product and the service innovation so that they will be able to attract the attention of the customers with the change in the preference as per thechange in the trend of the Tourism and travel business. They have planned to invest €10 million each year by 2020 to make the TUI care foundation stronger so that they will be able to cope upwith the economic and the social change of the target destinations in an effective manner(TUI, 2015).
Dailymail, 2014. Egypt hit by 95% decline in tourism revenue with western travel warnings and social unrest to blame. [Online]
Available at: http://www.dailymail.co.uk/travel/travel_news/article-2738446/Egypt-hit-95-decline-tourism-revenue-western-travel-warnings-social-unrest-blame.html[Accessed 17 November 2016].
Forbes, 2016. Spain's Shining Economic Recovery: Or, How The Eurozone Defines Success Down. [Online]
Available at: http://www.forbes.com/sites/timworstall/2016/04/16/spains-shining-economic-recovery-or-how-the-eurozone-defines-success-down/#703b8a5d11c9[Accessed 17 November 2016].
TUI, 2015. Guidelines for the environmental sustainibility in Hotels, London: TUI.
TUI, 2015. Sustainability strategy 2015-2020, London: TUI.TUI, 2016. Working with suppliers. [Online]
Available at: http://tui.g3dbuild.com/sustainability/working-with-suppliers#.WCzuJ9J97IU[Accessed 17 November 2016].
Worldbank, 2016. Egypt’s Economic Outlook- Spring 2016. [Online]
Available at: http://www.worldbank.org/en/country/egypt/publication/economic-outlook-spring-2016
[Accessed 17 November 2016].
WTT, 2015. The Authority on World Travel & Tourism, London: WTT.