Delivery in day(s): 5
Diploma in Travel and Tourism
Unit Number and Title
Unit 1 The Travel and Tourism Sector
There are various factors that have a great impact on the demand of tourism some of them are economic factors which are ranging with the exchange rate to the job, politics, growth in size of European Union, environment and taxation, crisis and threat which include earthquake, epidemics and terrorism, change in the demographic which includes shifting of age structure, effects of migration and the rise in the educational level, change in the technology like transportation, communication and information sharing techniques, change in the attitude of the consumer, product standardization, growth in the information channels and pricing strategies (Greaves, et. al., 2010).
It can be seen that international tourism is growing at the growing rate in the last decades and new destinations are emerging in the tourism sector. Hence, travel and tourism sector is facing issues in managing the arrivals and keeping the position. There are certain reasons due to which tourism demand is being getting affected these factors are:
Price Factors: TUI Group is facing issues with the competitive pricing. It could be evaluated that from the last decade competition in the tourism sector has increased at the increasing rates which is directly affecting the price of the tourism companies. Fluctuation in the pricings could be seen due to which it is becoming hard for TUI Group to manage the price and provide the appropriate price to the target customers which is resulting in the reduction in the number of customers of TUI Group.
It could also be analyzed that transportation cost is also getting increased with the increase in the price of the fuel and fluctuation in the economic aspects of the country. There are transportation services provided by TUI Group to its customers which are getting hiked with the change in time and are affecting the price of the travelling packages that are being affected by the company to its target customers (ENSIGHTEN, 2015).
Non –Price Factors: Income is one of the factors that directly affect the demand of tourism which affects the company. Income of the customer has a great impact on the demand of tourism. There are various people available in the market who do not prefer to travel because the packages provided by TUI Group are expensive and do not suits the pocket of the customer which directly impacts the demand.
Terrorism is another factor that affects the demand of the tourism. It is being evaluated that people prefer less to travel to the destination which is affected by terrorism or have a risk of terrorists. Paris attack is one of the examples. Paris tourism has evaluated the downfall in the tourist visits after terrorist attacks (Lattimer, 2010).
Natural disasters also have a great impact on the demand of the tourism. People prefer less to travel to the places which remain at the risk positions due to the natural disasters. This directly affects the tourism of that country as well as the companies working in the tourism sector of that company.
For every business strategy it is necessary to create balance between the demand and supply of the products and services that are being offered so as to ensure the smooth flow of the business as well as the industry. Supply in the tourism industry is being changing so that the smooth functioning could be managed for which stakeholders of TUI Groups also responded positively because demand was increasing due to the change in the supply. There are various factors in which modifications are done so as to meet the demand for the product and services offered in tourism. Some of the elements are provision for accommodation was kept, quality of the services was increased, seasonality was managed, and technology was also deployed in travel and tourism sector.
Accommodation services were managed by TUI Group so that increase in demand could get managed for which higher number of accommodation were developed so that more number of people could get the accommodation services at t peak time. To maintain the quality of the services TUI Group increased its staff members so that they could provide better and effective services to the target customers, changes were brought in the information system due so that utmost services could be availed to the service users of TUI Groups and their demands could be met by the company. To manage the seasonality in demand price were increased in the peak time and clause for reduction in the pricing in the off season was kept so that demand of the customers could get managed accordingly. Technology was another aspect that was focused upon by TUI Group so as to meet the demand of the customers (Lohman, et. al., 2012). To meet the demand of the customers in the peak season there were various technological advancements that were applied by the groups like for easy booking and reduce the broking changes TUI Group has developed the online site with the help of which people could easily book the services and make payments by just clicking on several links. Payment system of TUI Group is simple and secured by the firewalls which ensure that the payments could be done easily and safely.
Tourism industry is one of the fastest growing industries in the world with which there are various positive aspects attached and several negative aspects. Factors like economic, environmental and social have both positive as well as negative aspects attached for the tourism industry as well as companies working under it. Positive economic benefits include higher income, higher employment, and government tax base, higher receipts of taxation, increase in the export business, economic development, and inflow of the foreign currency. On the other hand negative impacts of the economic factors will include increase in the cost of living, inflation rate, demand of the services of public, increase in the property tax, and increase in the dependency of the economy on the travel and tourism sector (Dwyer, et. al., 2010).
Coming to the environmental aspects, positive factors that are attached with the environmental aspects are natural resource conservation, planning and control, beautification of the surroundings, revitalization of the community and maintaining the quality of the environment. Negative factors that are being observed in concentration with environment are destruction of flora and fauna of the host countries, degradation of the landscape, impact on the environment due to pollution, and scarce resources will also get affected.
Looking towards the social factors there are various positive aspects attached with social factors they are cultural values of the country will be conserved, historical monuments of the country will also remain protected because travel and tourism sector prefer to keep the historical monuments safe and secure so that it could provide the information to the visitors regarding the history of the country. Certain negative aspects attached with the social factors are loss of the domestic festivals and impact of the local culture that is being followed in the country (Gartner, et. al., 2011). These are certain factors and the negative and positive aspects that are attached with these factors which will help TUI Group to grow and could also affect the progress of the company. It is necessary that TUI Group should work on the negative aspects and should try to manage them so that country and culture should not get harmed and business could run smoothly and effectively.
For every business it becomes necessary to develop the strategies which could help it to grow in the market. As discussed previously that it is necessary that TUI Group should work on the negative aspects so that it could work smoothly in the market, it is necessary that it should develop the strategies with the effect of which it could minimize the negative impacts and maximize the positive impacts.
To manage the negative economic impacts TUI Group will have to formulate the strategy of managing the local standards of life at the managerial level so as to manage the standard of living, it is also necessary to include the local people in the economic policy so that they could get benefited accordingly. To reduce the dependency TUI Group could diversify the business according to the requirement of market. It is one of the most effective strategies that could be adopted by the groups so as to minimize the negative aspects (Greaves, et. al., 2010).
Negative impacts attached with the business environment could be minimized by applying the policies which could help in environmental sustainability rather than affecting it. It is necessary that TUI Group should make positive contribution in managing the environment and ensuring that environment could remain protected.
Negative social impacts could be minimized by helping the people available in the society and indulging in the welfare programs. It is necessary that TUI Group should contribute in the societal benefit programs so that society could grow and develop. Providing education facilities as well as better infrastructure will help the society to grow and develop.
These were some of the aspects applying which will hell TUI Group to minimize the negative factors which could affect the smooth flow of the business. Working on these aspects and developing the positive strategies will help the company to grow in the market and will ensure its success. It is necessary that TUI Group should develop the plans and policies which are related with the environmental as well as social sustainability because environmental as well as social growth will help the country to develop which will help the organization to move on the path of success and sustainability (ENSIGHTEN, 2015).