Unit 6 Issue in Travel and Tourism Assignment

Unit 6 Issue in Travel and Tourism Assignment

Introduction

The issue in travel and tourism is based on contemporary issues in travel and tourism that will support the skill development related with research within the travel and tourism structure. Through the investigation of the recent trends in the travel and tourism sector, an understanding will be developed regarding the ways by which the business related with the travel and tourism will respond to changes.

Task 1

1.1 Analyse issues currently driving change in the travel and tourism sector for a selected tourist destination.

There are various factors that are associated with travel and tourism. These factors are presently driving various changes inside the industry. For illustrating the factors, UK has been selected. It is considered as one of the most famous destinations among other destinations inside Europe. Having a rich culture as well as heritage, the destination has made a name for itself within the international tourism market. This is influencing the destination’s scale of economy as well as GDP. With the help of the advancements as well as developments of the available tourism traits, the destination has been improving their approaches in the present demand for tourism. (Horner, 2012)

There exist various issues by which changes are being imposed within the travel and tourism sector, which are mentioned as under,

Technological factors – There has been a considerable growth in respect of technological factors within the travel and tourism sector in addition to globalisation. Technological changes have created an influence over the business of tourism. By the developments in technology, various activities inside the UK’s travel and tourism business is being majorly influenced by modifying the implementations of technology. There has been an influence on the traveller’s lifestyle and behavioural aspect related with purchase through the developments in technology. By implementing technology such as e-commerce, the business related with travel and tourism in various destinations of UK is adapting the approaches that are customer oriented.  

Factors related with political change – The changing scenarios that are taking place inside the political environment influences the business related with travel and tourism. Various unrest situations due to the political issues are influencing the destinations. For instance, currently, UK’s exit from European Union which is termed as ‘Brexit’ is creating an impact over the economical causes as well as expenses associated with travel. Stress associated with political aspects as well as conflicting situations that occur due to political changes is impacting the travel and tourism business. (Horner, 2012)

Economical factors – Due to the changes occurring because of the exchange rates, global economic scale, rates of unemployment, variations in the trade rates, interest rates and many more are the factors that are emerging in respect of the economical scenario for the business of travel and tourism. In the current circumstance, Britain’s exit from Europe has been majorly influencing over the destination’s currency rates that are impacting travel and tourism business of the place in a direct manner.The changes in the economy influences the strategic aspects associated with the business of travel and tourism in addition to the traveller’s decision to purchase. In an indirect manner, it is also influencing the services industries as well as destination’s sector for hospitality. (Baker, 2015)

Health factors -Since, there has been a dramatically evolved market for international travel during the past decades, there has been simultaneous evolution of the health factors as well. The travellers are being prone to particular infectious diseases that are considered as potential risks towards health in respect of the travellers. There have been occurrences of epidemics associated with influenza, dengue, Ebola in 2014 and the main reason for the outbreak was infected people carrying the viruses to the foreign lands. Such occurrences are giving rise to the health factors within the business for travel and tourism. (Baker, 2015)

Terrorism factors – In the recent past, activities associated with terrorism are imposing direct threats to the business of travel and tourism. The ‘lone-wolves’ and ‘suicide bombers’ are making various locations as their targets that are considered as famous destinations for travel and tourism. Terrorist attacks that have occurred in the business centres of Jakarta, Tunisia, then attacks that have occurred in Turkey, Paris, Pakistan, Brussels and so on are striking concerns related with terrorism over the business of travel and tourism. The steady rise of these attacks is imposing fear within the travellers to make trips to tourism destinations.

1.2 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.

Two varied factors are presently influencing over the travel and tourism business in the Middle East and North Africa. These places are having the potentiality to attract a large number of tourists as well as develop the business related with travel and tourism. The political unrest that is taking place in these places is influencing in an adverse manner their reputation of being a famous tourism destination . Such political factors are instilling fear in the travellers who are planning to visit these tourist destinations. Hindrances are being created by political turmoil within the business of travel and tourism. There has been a significant rise in continuous protests that is deterring the travellers to select these destinations. The local riots, financial crisis, unemployment rates that are increasing are the causes associated with the political turmoil within the destinations such as Egypt, Syria, Tunisia and many more. There also have been growing crime rate within the tourist destinations of Egypt that is the reason for deteriorating rate of the arrival of tourists in the current scenario.

The travel and tourism business in places such as Egypt as well as Tunisia are being faced with impediments associated with terrorist attacks as well as political riots. Although, these places are having the potentiality to attract the travellers and do the increase in the generation of revenue from the business related with tourism, the growing political factors as well as riots are diminishing the arrival of tourist that is almost 80% less than earlier years. (Shah, 2016)

Because of such scenarios, the travellers in significant numbers are avoiding these destinations. Recent political factors that are occurring in Syria related with Civil War, is developing the refugee crisis there and as a result, a negative image is being imposed over these destinations in the Middle East. Another aspect associated with these destinations is of counter terrorism activity. The activities related with counter terrorism are conducted for curbing the actions associated with terrorism. (Shah, 2016) The growing terrorist activities of the terrorist group named ISIS are having a terrorism influence on these places. The growing activities of terrorism are imposing a serious threat towards the traveller’s safety in these places. For controlling the prevailing attacks associated with terrorism, in respect of Egypt as well as Syria, there have been significant developments in the activities associated with counter terrorism that are being implemented by the government. Such activities as well as the Laws associated with counter terrorism that are being imposed by the Egyptian Government are decreasing the zeal for travelling and as a result the arrival of the tourist number is getting reduced in respect of inbound as well as outbound tourism. (Shah, 2016) In these destinations, the legal actions that are being taken by the government are making the accessibility to these places more challenging. In addition to the legal factors, the business related with travel and tourism also gets influenced by the security concerns taking into consideration these places as well as mindset of the tourists regarding these tourism destinations.

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Task 3

3.1 Analyse how International Airlines Group businesses could respond to change.

In the present context, the International Airlines Group is being faced with various challenging aspects in addition with the environmental changes associated with the business. Specific strategic aspects such as improved alliances are required for approaching the changing scenarios in the present situations in the market. Different exchange rates, implementation of technology, emerging changes in the preferences of the customers, rise in lower rate carriers are affecting the International Airlines Group’s businesses. By associating with other airline groups, it will be beneficial for the International Airlines Group for attracting increased number of potential tourists or travellers from various places such as Asia for instance. The partnership with Virgin Australia was a profitable venture since it offered the accessibility to various locations such as Africa, Latin America as well as New Zealand. In respect of approaching increased number of passengers, there is requirement for accessing increased number of networks. With their approach to rising markets such as China, Korea as well as India and other developing tourism destinations, the airlines will have the ability for increasing the customer base. (Evans & Cambell, 2016)

SWOT analysis of International Airlines Group

Strengths (S)

It is supporting the structure of the company by holding the merger. Although, the group is taking into consideration the possible synergies amongst the two organisations, the structure is allowing the Airlines Group to function in a separate manner. This approach is considered as the main strength since it is helping them for avoiding the partiality when maintaining the acquisition.

• The Airlines Group has placed itself in the North Atlantic in a leading place in respect of seats having a market share of 14% for seats at the beginning of the schedule related with the summer of 2015. Having a share of 38% seats British Airways have gained a lead over Virgin Atlantic.
• International Airlines Group has made increased development with the restructuring of the labour process.
• It has successfully done its placement in the LCC segment in a better manner in comparison to Air France KLM or Lufthansa.
• International Airlines Group is having essential strength in respect of brand strategy.

Weaknesses(W)

• The Airlines Group was not successful in achieving enough return on invested capital or ROIC.
• British Airways has continuously done its placement as an expensive airline and did the measurement as the expense per available seat kilometre.
• The Airlines Group has very little presence in Asia Pacific.

Opportunities (O)

• The Airlines Group’s is constantly expanding in the Asia Pacific which is creating an better opportunity.
• Moreover, acquiring other airlines is quite beneficial for dealing with the Big Three Legacy that is considered very much effective.
• The closer assimilation between the airlines that are getting merged will be leading to the savings.

Threats (T)

• The rising competition in the LCC in respect of short haul is being posed as impending threats in respect of British Airways as well as Iberia.
• Competition is being placed by RyanAir as well as Easyjet in respect of Iberia as well as British Airways.
• Competitions that are occurring in the long haul markets from the Big 3 gulf carriers which are Emirates, Qatar Airways as well as Etihad. (Evans & Campbell, 2013)

PESTLE Analysis

• Political factors (P): Threats are being imposed due to the political influences over the approaches made by the airlines. The changes associated with the political aspects as well as the present legislations of the government in respect of the activities related with business for the airlines have been affecting the business. The growing concern in respect of carbon footprint as well as the legislations of the government related with the security systems in the airlines business is also influencing the strategic aspects associated with expansion. 
• Economical factors (E): Increased taxation as well as recession is considered as the major issues that are influencing the business of British Airways as well as Iberia. The rising prices in the international market are also influencing the aspect of fuel rise.
• Social factors (S): Taking into consideration the present lifestyle as well as trends in the market, it is required to make proper analysis before approaching the international market. Growing demands in respect of the airlines transport in activities related with leisure and in relation with business should be assessed by the International Airlines Group for having better customer base. 
• Technological factors (T): Technological innovations assist the International Airlines Group in reducing the costs as well as to make improved approaches in the competitive markets. Implementation of e-commerce systems, online booking, using enhanced flight equipments, self serving checking machines and many more are creating an improvement towards the International Airlines Group’s services. (Evans & Campbell, 2013)
• Legal factors (L): International Airlines Group is being faced with various factors associated with legal aspects within their business like regulations for safety, terrorist attacks as well as their influence on the legal structure of the government.
• Environmental factors (E): British Airways’ reputation is being influenced by the green movement approaches. Other than that, carbon emission, waste discharges are influencing the reflection of International Airlines Group. Therefore, it is mandatory for the group in following the environmental regulations.

3.2 Develop strategies on how International Airlines Group businesses such as British Airways, Iberia, Vueling and Aer Lingus could respond to change.

For responding to change, the International Airlines Group businesses such as British Airways, Iberia, Vueling, and Aer Lingus will be developing marketing mix strategy. This strategy is associated with four attributes which are regarded as product, price, place and promotion.

Product – The products that have been provided by International Airlines Group are effective for satisfying the requirements of the customers satisfaction. The Airlines Group will be adding more values within the services by the addition of various facilities such as loyalty for instance by enhancing the services of the aircrafts for attracting more potential passengers who will be having the ability to spend more. (CAPA, 2016)

Price – Other than British Airlines, other mergers in International Airlines Group are setting appropriate pricing policies for attracting various probable customers. For attracting customers in large numbers, Iberia is offering various discounts. For targeting the LCC segments with improved approaches, the Airlines Group is required placing effective pricing policy to attract individuals who has the need for some fringe benefits.

Place –International Airlines Group did the placement of their services in an efficient manner in various probable areas with the help of merger and acquisition. By approaching probable routes in various countries like those in the countries of Asia as well as Australia, International Airlines Group will be able to do the expansion of their network. The distribution channel in relation with the services of International Airlines Group is the tour operators as well as the online websites. Other than this, International Airlines Group airlines will be placing various technologies in respect of smooth transaction as well as improved experience of the customers. (CAPA, 2016)

Promotion – Various innovative approaches are taken into consideration by British Airways as well as Iberia. Other than these, special strategic aspects in regard to promotional aspects should be considered by other airlines depending on the peak season as well as dull season.

3.3 Justify strategies for how selected International Airlines businesses could respond to change.

British Airways is being regarded as the premium airways in addition with improved system approaches. The airlines company to maintain their position in the competitive market will be implementing the strategic aspects with appropriate assessment. Taking into consideration, the marketing mix strategies, it can be stated that British Airways is placing enhanced services with additional values in respect of the service quality to achieve higher position than the competitors.

The lower prices can create an impact over the demands of the probable customers. Since, higher class passengers are being targeted by the airline, sudden reduction in price will be creating a negative influence in their mind that will be leading to loss. Whereas, reduced prices will be leading towards targeting large section of middle class travellers. Special discounts in respect of the inbound market will be leading to the additional generation of revenue. (Grundy & Moxon, 2013)

Through the association, British Airways will be able to do the placement of their positive image in the international market. By associating as well as acquiring, the airline will have the ability for expanding the distribution channel. By approaching various routes, approaches associated with customer convenience will be taken into consideration as well. The ticket booking system should be taken into consideration through the enhancement of the technological aspects as well as the approaches. By associating, the airlines company will be having improved accessibility in respect of various locations while getting profits in addition to acquisition.(Grundy & Moxon, 2013)

With the help of promotional strategic aspects, the company will be making improved approaches in the market. The procedures as well as the legal methods that are being measured in the methods are also required for maintenance to keep strategic foothold in regard of policies of the government. With the help of promotions, there can be the accessibility of more market potentialities. (Grundy & Moxon, 2013) Taking into consideration, the countries such as Spain as well as America, the airlines company Iberia is conducting business with the help of appropriate strategies for business. In the present scenario, with the growing demand of the lower cost carriers, the business is being faced with specific factors. For having improved approaches, in the present scenario, the airlines company is required having additional value services. To analyse the present demands as well as to conduct the strategic aspects related with the business in respect of the demands should be required in respect of Iberia. Additional values are required for improving the services that are available. Various promotional approaches will be attracting increased number of customers.

Task 4

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.

The impacts of issues and trends that drive change in the travel and tourism sector are mentioned as under,

• Mergers –A merger is the corporate strategy for combining different companies into a single company to enhance the financial as well as operational strengths of the two organisations.
• Acquisitions – This is explained as to acquire records and to take possession of an asset through purchase. This is associated with having organisational control by purchasing 51 percent of its voting shares. Moreover, another, with the help of purchasing its shares or assets, regards it as the purchase of one organisation.
• Liquidations – Liquidation is an event that generally occurs when an organisation declares insolvency that states that it will not be able to pay its due obligations. The operational scenarios of the company are closed down and there occurs division of assets between the shareholders and the creditors. 
• Formations of Consortia – There is the formation of the most standard setting and consortia of standards supporting with the help of individuals with no prior experience of creatin such entities. (Jenkins, 2011)

In respect of the case study, the kind of change that took place in Thomas Cook was related with Merger. There has been the merging of Thomas Cook as well as Co-op to create the biggest high street travel chain in UK. The organisation that was newly created will take into consideration more than 1,200 shops all through the nation expecting a savings of almost £35 million per year through the combination of the functional aspects of the headquarters and back-offices. (Page, 2012) The changing impacts on businesses are related with new scopes, encouragement of innovation, better effectiveness and better attitudes. The impact of the current trends that drives the change in the business associated with travel, tourism as well as hospitality can be actualised in relation to product and services and employment levels in respect of Thomas Cook.

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.

The consequences of businesses failing to respond to market change are as under,

1. Diminished sales and profitability – Sales and profitability for the company are diminished.
2. Margins of profit – There is a significant reduction in the margins of profit.
3. Changes in attitudes –There are attitudinal changes in regard of customers, competitors as well as suppliers.
4. Negative impact on image – There is an adverse impact on the product, service or business related organisational image. (Kozak, 2010)

Considering the present factors, that influences Thomas Cook it can be inferred that the 172-year-old group has failed to adapt to the changing scenarios created by the present factors as well as trends in the business of travel and tourism. As a result, the organisation had to face a loss £590 million during 2010 as well as 2011. A huge debt was faced by the organisation that amounted to £156 billion. They had no other option but to shut down 200 high street stores as well as remove 100 managerial posts. More than 2000 jobs in UK were axed as well. As a result, the organisation garnered a bad reputation as well as loss of trust within the customers. Potential customers were taken from them by the other competitors. In addition to this, the suppliers did not do trading with Thomas Cook to avoid payment due to insolvency. It was a failure from Thomas Cook’s end for not being able to see the new trends in relation with tourism.

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Conclusion

This assignment is related with contemporary issues in travel and tourism in which the factors that are presently driving change in travel and tourism sector are evaluated for a selected tourist destination. Moreover, two different current factors are being evaluated for using appropriate processes and resources that concentrates majorly on the imapct of the political disturbance in the Middle East and North Africa. Also, the evaluation of the recent trends that impacts changes are done.

References

Baker, D.Mc.A. (2015). Tourism and the health effects of infectious diseases. [online available at:]. http://www.palermo.edu/Archivos_content/2015/economicas/journal-tourism/edicion12/03_Tourism_and_Infectous_Disease.pdf.(assessed on 23/7/16)
CAPA (2016). IAG tells Iberia to prepare for a changing Europe- Latin America competitive setting. [online available at:]. http://centreforaviation.com/analysis/iag-tells-iberia-to-prepare-for-a-changing-europe-latin-america-competitive-setting-81071 .(assessed on 23/7/16)
Evans., N and Campbell., D. (2013). Strategic Human Resources Management for Travel and Tourism. Routledge
Grundy, M. and Moxon, R., (2013). The effectiveness of airline crisis management on brand protection: A case study of British Airways. Journal of Air Transport Management, 28, pp.55-61.
Horner, S. (2012). Business Travel and Tourism. Routledge
Jenkins, D (2011). Managing Empowerment. Random House.
Kozak, M (2010). Managing and Marketing Tourist Destinations: Strategies to gain a competitive edge. Routledge.
LaGrave, K. (2016). How Terrorism Affects Tourism. [online available at:].  http://www.cntraveler.com/stories/2016-03-31/how-terrorism-affects-tourism .(assessed on 23/7/16)
Page, S.,( 2012). Tourism management. Routledge.
Shah, A. (2016). Middle East and North Africa Unrest. [online available at:]. http://www.globalissues.org/article/792/mideast-north-africa-unrest  .(assessed on 23/7/16)