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Unit 6 Contemporary Issues in Travel & Tourism Copy Assignment
Travel and tourism sector is one of the most attractive sectors which are facing many contemporary issues which are hampering the growth of the industry. With the development in the industry, there are many factors which affect the global tourism. The Unit 6 Contemporary Issues in Travel & Tourism Copy Assignment covers many issues which are currently taking place in the tourism industry and is enhancing or destroying the tourism business of various countries. The discussion about the niche sector of tourism has also been discussed and further the strategies have been discussed for British airways and Iberia airlines. It has also been discussed that what consequences the business have to face when it is not able to respond to the changes in the market. (Baloglu, 2010)
1.1 Analyse issues currently driving change in the travel and tourism sector for a selected tourist destination. You have to include at least three issues and give detailed explanation of the issue and its impact on the travel and tourism sector.
The selected tourist destination for discussing the current issues is United Kingdom. UK is one of the most favourite tourist destination in the world and the no of tourists visiting to UK are huge in numbers. It is because UK is rich in the heritage and cultural factors and also there are many tourists’ destinations which are contributing a much amount to the nation’s economy. There are some places which attracts most of the tourists coming to UK which are London, Edinburgh, Manchester, Liverpool and many more. These places are the key tourist destinations and the government is putting more efforts in increasing the numbers of tourists visiting every year (Campbell, 2012).There are many issues which are driving the change in the travel and tourism sector of UK, these issues are discussed below:
- Internet: It is seen that Internet plays a main role in increasing the demands of tourists to travel to a certain place. It connects people of different countries to each other and they can collect information about different tourist destinations from the internet (Nand, 2012)
- Travel companies and their packages: Also the emergence of different travel companies in the industry has increased the demands of the consumers/ visitors to travel different places. They offer attractive packages and offer which allures the visitors and that too these companies are available on online platforms which increases the no of visitors. The visitors can also ask their queries online by mail or by calling the numbers given on the website. The travel agencies also have their offices where a customer can visit and discuss about the available packages and discounts which can be offered by the company. The marketing strategies by these companies are effective in attracting more no of customers for a particular country (Statista.com, 2016)
- High per capita income: The spending capacity of people has increased in recent times and this is because they are getting high per capita income. People are now spending much of their income in the entertainment activities which can give them enjoyment and pleasure. It is a very strong change and driver for the increased tourism in UK.
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, terrorism and counter-terrorism measures, severe weather, local and international laws.
There are certain factors and issues which affect the tourism in the countries. These current issues include the terrorism activities, local and international laws or the severe weather conditions. These issues are discussed below:
- Terrorism activities: These activities have an objective to create a fear in the mind of people. The terror attacks in North Africa and mainland Europe has caused a fear in mind of the people and they are trying to opt for the safer destinations for their holidays. According to (Coldwell, 2016), the bookings of the countries which are facing terrorist attacks are on decline. For e.g. Egypt has seen a huge decline in the no. of visitors. According to a survey conducted by the Guardian, 30% of the travellers of United Kingdom consider safety and security as the most important and crucial factor while selecting a tourist destination. The terrorism activities have such a huge impact that the airlines of UK like Easy Jet and British Airways had to suspend many of its flights to the places which have larger chances of terrorism attacks. For e.g. the attacks in Paris also affected its booking numbers. These tragic events are responsible for less no of booking by tourists for a particular destination (Cordesman, 2016)
- Political unrest in Middle East and North Africa: According to (hoteliermiddleeast.com, 2011), the tourism department of Egypt and Tunisian are putting their best efforts to enhance the numbers of tourists at these places but despite of these efforts, the number of tourists are on constant decline and one of the main reason behind this is the political unrest in these countries. The infrastructure development in the countries like Libya and Algeria is like postponed for an indefinite time just because these countries are facing a very bad time. The oil prices raised to a very high level because the production is getting affected and the prices of the Air tickets is been on rise due to this which is again affecting the tourism of these countries. The higher prices and political unrest is attracting people towards other countries which are safer and comparatively cheaper (Basu & Marg, 2010).
3.1 Analyse how International Airlines Group businesses could respond to change.
International Airlines Group is one of the largest airlines group and it has around 533 aircrafts which flies to more than 250 destinations. It stands on the third position in Europe and sixth across the world on the basis of revenue. It is the parent company of British Airways, Iberia, Aer Lingus and Vueling. International Airlines Group can respond to the changes and for analysing those factors, it is important to do the analysis of Strengths, Weaknesses, Opportunities and Threats which can be done through SWOT tool (Christou & Gretzel, 2012)
The SWOT analysis of International Airlines Group is given below:
- IAG has a large customer base
- It has a wide coverage of destinations to which it travels
- High growth rate with a good and strong brand name
- Market is highly competitive
- Company is facing the problem of high costs and low returns on invested capital
- It has weak network in Asia pacific region (Yiamjanya & Wongleedee, 2014)
- It can expand its business to Asia Pacific region
- It can acquire more airline brands
- It can offer more products and services to the customers to attract them
- It has strong competitors in the market
- The regulations of the government are strict and they have to be followed
- The increasing costs of raw materials (Clarke, 2012)
Another tool is PEST analysis to study the environment of IAG group, which is given below:
- Political factors: IAG airlines have to follow the highly regulated contract law by the government. Also it has to pay the tax at the rates decided by the government like the VAT increased at 20% in the year 2011 which increases the overall returns of the company.
- Economic factors: Economic factors include recession in the country which affects the no of travellers or customers of the company. It also includes the changes in the prices of the raw materials or fuel which increases or decreases the costs of the company. The change in the exchange rates will also affect the no of customers to the company.
- Social factors: These factors include age, lifestyle or social circle of people which affects the business of the company. The average age of generation of UK is older which have more chances to travel as they have more leisure time. It also depends on the travelling trends in the country (Bramwell & Lane, 2010)
- Technological factors: This includes the innovations in the industry which involves internet and online which has been adopted widely by the company for meeting the competition in the industry. Online services helps the customers to book tickets online or to have any information they want (Clarke, 2012)
3.2 Develop strategies on how International Airlines Group businesses such as British Airways, Iberia, Vueling and Aer Lingus could respond to change. You need to select and develop strategies for at least two businesses. Provide detailed explanation of your strategies.
International Airlines Group has to develop many strategies in order to respond to the changes in the market. The strategies which are selected and developed for the two businesses British Airways and Iberia airways are given below:
British Airways is among the leading airlines in UK. The main elements which are needed to develop strategies of British airways and Iberia airways, which are also a subsidiary airline company of IBA group, are given below:
For developing strategies, it is one of the main elements to be considered. British Airways sets prices according to classes so that every class of customers can travel with the company. Prices are decided on the basis of addition of value added services.
The services are designed for upper class of customers. So the prices set are high for the upper segment of consumers who can pay higher prices.
The products of British airways are designed to fulfil the needs of customers. The flight tickets are its products which are priced reasonable for the customers.
Its services and products are designed for upper class of customers and the business class (Clarke, 2012)
To communicate and promote the services, British airlines have launched its mobile applications to provide an ease to the customers. It also provides special discounts on the special occasions like Christmas (Christou & Gretzel, 2012)
It promotes its products by advertising online, through social media or by word of mouth.
British airways joined its hands with various airport authorities to carry on its operations.
It operates through various airports with the headquarters at Madrid.
The businesses can adopt from one of the following strategies given below:
- Product development: In this, the companies can focus on developing new products in the market in order to fulfil demands of the customers in a better way. British airways can focus on this strategy by developing new products.
- Market Development: This strategy is aimed at launching the existing products in new markets for tapping new markets for gaining more market share. Iberia airlines can focus on this strategy to gain more market share as till now it has a limited market share (Baloglu, 2010)
3.3 Justify strategies for how selected International Airlines businesses could respond to change. Your strategies in 3.2 needs to be clearly justified with supporting arguments.
The strategies which are discussed in the above task for British airways and Iberia Airlines can be very beneficial for the success of these organisations. Product development strategies can be helpful in attracting more customers to British airways and in making it the top airline company in UK. PEST analysis and SWOT analysis helped the company in understanding the current needs and demands of the consumers and their expectations which can be fulfilled by the airline companies. The company can take benefit of the sports and other events which takes place in UK and can design its new products (David & Rachael, 2009). Iberia can do marketing development to capture more markets and for this they can advertise themselves in the new markets to make customers aware. They can take help of Internet and social media for the development of new market for their products.
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 and The Travel Network Group.
There are many issues and trends which drives change in the travel and tourism industry. These are the issues which also affects the businesses of Thomas cook, The Travel Network Group or Myla travel agency for which I work. These changes can be political, technological, economical or social. These organisations have to adapt to these changes in order to function properly in future and to move ahead in the market. Myla agency is the travel agency which has around 10 offices in UK and the travel company giant Thomas Cook is planning to expand its business with Myla Travel and the company also has an invitation to join The travel Network Group (Nand, 2012). The trends and issues in the sector will decide the future of Myla agency:
- Investments: The travel agency is not limited nowadays it has been expanded to a large scale, so to fight the competition, Myla agency needs a huge amount of capital for investments which can be done by joining either of the two agencies. Investments are done to provide more and better service to the customers and to expand markets further. More customers have to be acquired by providing better customer services to them.
- Regulations: Myla agency has to take care of the regulations and laws which are to be followed. These regulations are imposed by the UK government for better governance in the industry (hoteliermiddleeast.com, 2011)
- Customer Lifestyle patterns: the customer has changed in terms of their choice, demands and expectations. Now the customers expect more quality in the products for which they are ready to pay the price. The lifestyle of the customer has been changed with the changes in income and economical factors in the country.
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.
Market is highly competitive and the customers are more demanding than ever before which forces the organisations to provide better quality services and for this they need to adopt the changes in the markets which can be in political, economical, cultural or technological form but if the organisations fail to respond to these changes in the market, it has several consequences:
- Low market share: the failure in adapting to the market changes lead to the low market share of the company. It would not be able to fulfil the changing demands and expectations of the customers, it will not be able to survive in the market for long (Campbell, 2012)
- Low revenue: Low market share will lead to low revenue because the no of customers will be less who would be contributing to the revenue of the firm. The costs will be same but the revenue will be less because of which the company will not be able to meet its costs.
- Reduction in brand value: when Myla travel will not be able to respond to the changes, it will slowly lose its brand image which will show an effect on the revenue and profits of the firm, loss in the customer trust and customer satisfaction which will ultimately hamper the business of the company (Yiamjanya & Wongleedee, 2014)
So, it is clear that when the companies are not able to respond to the changes in the market, they usually lose their market share, customers and business in the market.
It can be concluded that due to globalisation, Travel and Tourism industry has seen a major change and has seen an immense growth. There are some current issues which affect the tourism in various countries like political unrest or terrorism activities which have resulted in the decline of tourists. Different business strategies have also been discussed for British airways and Iberia airlines. These above discussed contemporary issues plays a very important role in the travel and tourism industry and these can be taken into consideration for future success and growth of the travel industry.
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Reporter, T. (2012, 10 11). Sport provides a boost for UK tourist industry as 900,000 football fans flock to Britain. dailymail .
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travelweekly. (2015, 06 24). Outbound travel contributes £28.3 billion to UK economy. travelweekly .
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