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Unit 6 Contemporary Issue in Travel and Tourism Assignment Sample
Diploma in Travel and Tourism
Unit Number and Title
Unit 6 Contemporary Issue in Travel and Tourism
In this Unit 6 Contemporary Issue in Travel and Tourism Assignment Sample several aspects of the travel and tourism is highlighted, Tourism plays a major role to boost the economy of the country. The contribution arising from the travel and tourism sector are divided in three categories which are induced impact, direct impact and indirect impact. The valuation of the contribution is around 7.6 trillion US dollars from the period of 2014 to 2015. Direct impact contributes around 2.36 trillion US dollars which involve the accommodation, entertainment, attractions, transportation, shopping etc. Middle East and North Africa are often known as MENA which have a huge potential in the tourism sector due to the popular and beautiful attractions. But the events like the political unrest, terrorist activities are influencing the travel and tourism sector heavily towards downward. The current trends and focusing on the niche tourism also play an important role. Strategies of the International Airlines Group will be shown based on the travel and tourism business. Lastly the tour operator Thomas Cook will be discussed based on the given case study.
1.1 Analyse issues currently driving change in travel and tourism sector for a selected tourist destination. You have to include at least three issues and give detailed explanation of the issues and its impact on the travel and tourism sector.
One of the largest sectors of the countries is travel and tourism which is attractive and boost the economy significantly. Each and every country across the world is giving their focus to the travel and tourism industry for increasing the tourist expanses in the concerned country. The contribution arising from the travel and tourism sector are divided in three categories which are induced impact, direct impact and indirect impact. The valuation of the contribution is around 7.6 trillion US dollars from the period of 2014 to 2015. Direct impact contributes around 2.36 trillion US dollars which involve the accommodation, entertainment, attractions, transportation, shopping etc. Overall this sector has fetched around 1,159 bn dollars. (Statista, 2016). The selected destination is Sri Lanka which is also known to be the Emerald Island of Asia. The major attraction in this country is the wildlife parks, beaches, beautiful sceneries etc. Golden Temple of Dambulla in Sri Lanka is one of the heritage spots very popular across the globe. The visits in Sri Lanka are increasing due to the positive approach by the Government. Sri Lanka Tourism Development Authority is responsible to look after the tourism issues in Sri Lanka. The current issues that are driving the changes in the travel and tourism sector are as follows:
- The management of the hotels in Colombo fixed a pricing policy for all the hotels operating in the hospitality sector after the civil war. The forum was created to fix the standard of the hotel and also to control the unscrupulous policies by the hotels in Sri Lanka. The impact which has created due to the establishment of the pricing policy and standard is the increase in the charges of the accommodation from 40% to 50% per night. If we consider the standard then also it is not aligning with the prices that are charging by the 5 star hotels. As a result it will be quite significant that the occupancy rate will go down for the improper charging of the price. As per the Russian Tourist Board is concerned they also state that the overpricing is the main issue for the tourist refusal in Sri Lanka. (Kelegama, 2014)
- One of the important issues is the lack in the competent human resources management. The growth rate of the tourism sector is growing so in order to align the demand of the tourist, the hotels are expanding their operations as well as infrastructure. The increase in the rooms is accounted for 75% in Sri Lanka which is saying that majority of the hotels have expanded their infrastructure to meet the requirements of the tourist. The universities in Sri Lanka are not generating the significant number of efficient student in the travel and tourism sector. The major constraints are the lack in the communication skills due to the deficiency in the training approaches. Government needs to develop a strategy to increase the qualified graduates and prevent the migration of the efficient people in travel and tourism sector of Sri Lanka in UAE, Oman and Maldives. (Hannam & Knox, 2010)
- The cultural values in Sri Lanka are very rich and stand different than other parts of the world. Foods, traditional beliefs, customers are very much different. There are many tourists who like to explore the world in order to study the cultures of different countries. The costal foods are attractive in this place which includes the dishes of sea fishes. Art and culture is rich which can be observed from the Dambulla and Silgiriya. But the negative part is the customs which are still prevalent in different parts of the country that imposes fines to the tourist who breaks the rule.
1.2 You should analyse at least two different current issues using appropriate methods and resources in depth focusing mainly on the impact of political unrest in the Middle East and North Africa, tourism and counter tourism measures, severe weather, local and international laws.
Middle East and North Africa are often known as MENA which have a huge potential in the tourism sector due to the popular and beautiful attractions. But the events like the political unrest, terrorist activities are influencing the travel and tourism sector heavily towards downward. Political instability in Lebanon gives rise to the terrorism activities or terrorist activities after the Persian Gulf War have diminished the travel and tourism activities in those areas. On the other side media who is covering the every single incidence which have created a solid impression on the mind of the travellers across the globe (Batrawi, 2014). Syria which covers several destinations for the travel and tourism are observing a declining trend due to the terrorist activities of the ISIS. Peoples are killed brutally in that place and also they have attacked Paris and Belgium very recently which took innocent life. Egypt is a place where the mixture of the ancient beauty covering the pyramids, mountains and also the amazing scenery covering the place. But the political unrest and terrorist activities dropped the tourist visit around 80% which very much remarkable. The terrorist groups Ansar Bayt Al-Maqdis (ABM) and Ajnad Misr are attacking the Government of Egypt creating an environment of violence. In Tunisia we found a man fired himself in front of the policeman and for this incident political unrest took a severe place in the country which threatens the tourist during that time. Overall we can observe the violence is spreading in those countries of MENA which are declining the tourism industry. (BBC, 2015).
Implementation of 1540 by all the Middle East states which aims to prevent the proliferation of the nuclear, chemical and biological weapons. Illicit trafficking is given focus in this 1540 resolution. Abdul Fattah Al Sisi, president of Egypt has taken measures for the counter tourism activities by amending the legislation for the Jihadist groups. Funding the terrorist will be penalized and have to face the imprisonment up to 25 years. Cyber crimes are also given preference where imprisonment is around 7 years with high fines. At international level, different measures are also adopted to establish peace and to counter the terrorism. United Nations in their security council established the Counter-Terrorism Committee (CTC) for combating with the terrorist attacks and to form a member states jointly to fight with the terrorism. (UN, 2016).
(3.1) Analyse how International Airlines Group could respond to change
The Travel and Tourism Industry deals with one constant phenomenon and that is change. Businesses have to be prepared to deal with these changes on a frequent basis to stand in good shape. Airlines like Iberia, British Airways, Aer Lingus and Vueling belong to the much renowned parent company of the International marketing Group. Two primary aspects of response to change have been highlighted here. Iberia’s tactics to deal with the changing Europe Latin American competitive setting and the revised growth plan to be determined by IAG for the affected demand of British Airways post the terrorism activities in Brussels.
Iberia for quite some time now has been the leading carrier between Europe and Latin America. But due to the gradual emergence of other competitors, Iberia needed to resort to an assessment period. The largest offer on Latin American flights is provided by Iberia. However, Air France is rapidly closing in as more than a considerable competitor. An instance of relevance can be of the week of August 2012 (20th-26th) Iberia had scheduled 172 flights through the week for operations between Spain and Latin America aiming to cover a total of around 17 destinations. Air France was not far behind at all with 169 flights covering 16 destinations. Generally, the long haul operations turn out to be quite productive for Iberia but in 2012, the results and the competitive market made it insufficient for them to justify any long term plan. In order to counter this change, Iberia aimed at considerably improving their per unit revenue performance especially on the Latin American Routes as it wanted to retain the competitive advantage by a considerable margin. The Chie of IAG, Mr Willie Walsh confirmed that the best revenue management steps were being incorporated and expectedly the airline soon saw a hike in the per unit revenue performance catering to Latin American routes. (CAPA, 2012)
One of the major aspects that can affect the travel and tourism sector of any country is the dreaded acts of terrorism. One of the events that recently shook Europe and the rest of the world were the terrorist attacks in Brussels which was consequential for instant low demand for aircrafts especially in Europe. However Mr Walsh stated that they were not willing to wait for the impacts of the terror attacks as earlier they had anticipated similar outcomes during the Paris attacks which held them in good stead now. Complimenting the falling demand was important and hence BA started offering fewer seats per aircraft. IAG still surpassed the estimates of profit provided by analysts (145 million) as BA acquired an operating profit of 155 million pounds in the first quarter as a result of effective cost cutting and low fuel costs. Although the passenger unit revenue declined by 4.7%, the overall profit registered in 2015 was an increase by 64% that amounted to 1.8 billion pounds. This is a prime example of how IAG reacted to Terrorism and change. (BBC, 2016)
3.2) Develop strategies on how IAG services like BA, Iberia, Vueling and Aer Lingus could respond to change. Develop strategies for at least 2 businesses. Provide detailed explanation of strategies.
One of the primary carriers between the destinations of Europe and Latin America is Iberia and has been for quite some time. However, the inception of a few competitors has ensured that the airline enters into some sort of an assessment period. Air France stands as one of the leading competitors to Iberia on this route. The assessment period is necessary as other low cost airlines and fast speed trains also made the list of relevant competitors on this route. Prevalence of labour disputes in Spain along with their falling economy added to the concerns of Iberia as all of these factors along with the competitors posed potential threat to the airline in generating effective revenue as there was a tendency prevailing for the falling demand of the aircraft which could lead to an annual operating loss. The strategies that can be adopted to counter this situation are:
- If there is a low demand, it means that the number of heads per aircraft will also be less. In this case, the carrying capacity of the aircrafts should be minimised in terms of the total number of seats available for offer per aircraft.
- Profitable routes can be termed as the ones that attract the most traffic and non profitable the ones which does not attract high traffic. Emphasis should be laid on the profitable routes primarily.
- The production costs of aircrafts should be regulated and any unnecessary expenses should be done away with as profit maximisation should be the primary objective.
Analysis should be done on the prevailing and anticipated market trends keeping the consumer base and the airline market in mind. . (Majorca Daily Bulletin, 2013). British Airways has enjoyed competitive advantage in the long haul sector operating out of the UK for a long time and hence should look to consolidate its position so that it keeps intact its competitive power. It is a well known fact that BA provides top notch services especially in the long haul operations, so there is no immediate need of changing anything as such as the present course of operations has worked for them. However, strategies can be adopted to help the passengers on the ground as BA flight operations have outgrown the Heathrow Airport Terminal 5. For passenger convenience, Terminal 5 has been made available for passengers. BA shifted eight long haul services from terminal 5 to terminal 3 in London Heathrow. The following airline flights were shifter to terminal 3 as on 2015. They include Accra, Cape Town, Denver, Las Vegas, Miami, Nairobi, Phoenix and Vancouver. This differentiated them from their competitors as far as ground operations are concerned and this will hold BA in good stead even if major competitor’s crop up for the long haul market as their ground operations facility will be difficult to match. (Businesstraveller, 2015)
3.3) Justify strategies for how selected International Airlines Businesses could respond to change. Strategies in 3.2 needs to be clearly justified with supporting arguments.
The International Airlines Businesses taken into consideration here is that of Iberia and British Airways.
- Iberia is one of the primary carriers when it comes to magnitude and frequency of operations between the destinations of Latin America and Spain. However, Europe is also famous for low cost airlines as there are many companies who look to enter the market as the same. Thus low cost airlines along with high speed trains tend to make the list of competitors for Iberia especially in this route. Further adding to Iberia’s turmoil is the economy of Spain and the prevalent labour disputes in the country. If the same trend continued to feature, then there could be a lack of demand for flights. Thus in such a situation, saving up on manufacturing costs is a good bet. Low demand will mean that the number of people travelling per aircraft will be less and thus aircrafts would operate as ‘not fully packed’. This would be a loss as number of seats would be empty but the distance covered would be the same. Thus decreasing the number of seats per aircraft is the most viable option as not only it would save up on the extra manufacturing costs of the extra seats, it would also mean that now there is a fight or rush for availing a seat out of the limited availability of vacant seats that prevails. On perceptive grounds, a big aircraft which is not completely full might affect the psyche of the passengers as they might reflect upon more popular options. However a packed flight will ensure to the passengers that they are flying what is probably the best option. Moreover, it would give profitable returns to the company as prices could be fixed at a premium strategically keeping in light the minimum number of seats available.
- In long haul operations for British Airways, the main competitors include that of Lufthansa, Emirates, etc. (Punzel, 2013) BA is quite established in long haul operations and operates at an average price that is similar to other carriers and the service that they offer is one of the best. Hence, despite of these competitors they don’t face any threat as such. However competition can be on the ground operations facilities. The increasing number of long haul BA flights means that a lot of passengers accumulate at terminal 3 of the Heathrow Airport. The emergence of terminal 5 catering to BA operations means that passengers have enough room and comfort at the airports as they look to avail their respective BA flights. Passengers may be driven to purchase a BA ticket instead of the other two considering the ease of operations on the ground at the airport as the cost of ticket for all the long haul flights is almost similar. Thus it has to be said that the new terminal for BA operations at the London Airport will help it counter any change brought about by any long haul competitors which is anyway few in number. (Symonds, 2008)
(4.1) Analyse the impacts of issues and trends that drive change in the Travel and Tourism Sector with reference to Myla Travel, Thomas Cook & The Travel Network Group.
Companies like Myla Travel, Thomas Cook and The Travel Network group should look to consistently consider all the factors that affect the travel and tourism sector of UK and of any country actually. These factors can be distinguished as internal and external factors. The primary external factors include:
- Foreign Policies: The foreign policies of other countries along with the international relations happen to have both favourable and adverse effects on the travel and tourism industry. For instance, the cordial international relationship that UK share with India ensures that the international VISA laws are not stringent and therefore does not create problems for UK tourists flying to India. However, if there are international issues with a particular country, then tourists may be apprehensive in visiting such a place. For instance British people would love to visit other European countries like Greece and Italy but they don’t owing to the crisis prevalent in these countries.
- Currency Rates: Currency rates for different economies keep fluctuating. Global inflation is one of the factors to be considered by tourists. This is why British citizens avoid going to places like the America or the Middle East even if they would love to owing to the depreciating value of the pound against the currency rates of these economies. UK is facing inflationary problems and that resists the citizens from planning a lavish holiday to desirable locations.
- Security Protocol: Terrorist activities across the world has made it tough for a British citizen to get a tourist visa for international countries compared to earlier when it was relatively easier. Similarly due to the consistent terrorist attacks in Europe, it now has also become difficult to attain a UK visa for outside nationalities as it requires people to clear long security criteria.
The Internal factors include the following:
- Weather Conditions: The weather condition of any country contributes to the internal factor influencing the tourism sector of the country. UK only has a short spell when it experiences good weather and therefore tourists have a limited timeframe within which they look to visit UK. A major demography of the country comprises of the youth of the country who look to take up jobs and internships during the summer period which further diminishes the tourism chances by restricting the clientele of travel and tourism companies such as Myla Travel, Thomas Cook and The Travel Network Group. (Veal, 2011)
- International Events: Another internal factor is the staging of international events. Events of Global business significance like the recently concluded Olympics, the English Premier League, Music concerts by International artists etc attract a lot of people from all across the world for their passion in their respective fields of interest like sport, music, etc. This gives travel companies like Myla travels, Thomas Cook and The Travel Network Group to improve their revenue generation and revive their market shares as these events attract a lot of international traffic in the form of tourists thus improving the scenario of doing business in the travel and tourism sector.
(4.2) Discuss the likely consequences of businesses failing to respond to market change with reference to Myla Travel, Thomas Cook and The Travel Network Group.
Myla Travel, Thomas Cook and The Travel Network Group have to remain open to change if they are to entertain thoughts of growing. Adverse consequences can be a result if these companies do not respond pertinently to change. The following factors are to be considered, the failure of which will lead to adverse consequences for these tourism businesses.
- Low Consumer Base: The tourist companies stated above have to realise that the number of independent and solo travellers across the world is increasing and hence travelling is no more about majorly being family vacations. The Internet has influenced more number of independent travellers and hence the marketers of this company have to tap into this demographic segment. Failure to identify this demographic will lead to a diminished consumer base. (Page, 2012)
- Restricted Customised holiday packages leading to low Niche Tourism: These travel companies need to understand that the trend of people travelling to over commercialised areas is falling and tourists now look to pursue their interests and aspirations while travelling. Hence the companies should aim to reach out to a larger customer base online and look to provide customised packages to the consumers. Adventure, wine & food, dark, etc are all examples of niche tourism. These should be promoted in the customised packages so that tourists can identify their aspirations and decide to book a tour. Failure to do this will result in decline of the niche tourism market.
- Security Reassurance: The tourism companies have to establish faith among the customers that security provision determined for the safety of the tourists is more than full proof and sufficient. The biggest threat is terrorism and tourists need to be sure that effective security measures are present in order to counter any terrorist activities. Failure to do this will only lead to a loss for these companies as no one will be willing to travel to UK purely because of the apprehension in mind regarding the security prevalence.
- Lack of Financial Assistance: Owing to the financial crisis in 2008-2010, it is significant that travel companies like Myla Travels, Thomas Cook and The Travel Network Group offer easy financial assistance to its tourists. Instead of offering petty discounts on packages which hardly make a difference in the long run, effective financial advice should be given to the tourists that will help them plan their finance properly and help them increase their credit score for the purpose of obtaining loans. This will be beneficial for both the traveller and the companies. However failure to provide effective financial assistance will lead to travellers being double minded about their tour especially the budget travellers who don’t have the liberty to splurge unlike the compulsive traveller. It might affect them so much that they might end up deciding against the tour. (UNWTO, 2013)
This Unit 6 Contemporary Issue in Travel and Tourism Assignment Sample provides an effective insight on the various ways that countries across the globe react and respond to change so that the overall status of the travel and tourism sector of the country remains intact. Different countries in the world have a distinct set of reasons that drive change in that particular region and hence the means implemented in order to counter the change in all these countries is different. The economy of many countries is solely dependent on the travel and tourism sector. One example of that can be the Emerald Island of the nation of ‘Sri Lanka’. On the other hand the main complexities in countries like the UK is the process of dealing with the country’s recession and travelling to such places often involves an incredibly high cost and thus these are the factors that need to be mended. This provides a contrast of roles that Travel and Tourism plays in countries like Sri Lanka and the UK. We get a detailed analysis of the development and justification of the various strategies implemented by the International Airlines Group to respond to the various aspects of business factors of change pertaining to British Airways, Aer Lingus, Iberia and Vueling. Finally we get insight on the impacts of issues and trends that drive change in the tourism sector with reference to organisations like Myla Travels, Thomas Cook and The Travel Network Group. A brief analysis is also provided on the various consequences that may arise due to the failure of administering and implementing ways and methods that initiate an effective response to change on the part of these travel and tourism organisations. These are the various avenues covered by this effective study.
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Majorca Daily Bulletin, (2013). IAG to slash Iberia work force by 3800 as it battles competition. [Online]. Available at: http://majorcadailybulletin.com/news/local/2013/03/01/33779/iag-slash-iberia-work-force-800-battles-competition.html, Accessed on: 8th June, 2016.
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In this Unit 6 Contemporary Issue in Travel and Tourism Assignment Sample several aspects of the travel and tourism is highlighted, Tourism plays a major role to boost the economy of the country, Locus Assignment Help UK posting units solutions so scholars can explore assignment help and get review the quality of our work.